Fruit smoothies and muffins make ‘basket of goods'

Fruit smoothies and muffins have been included in the Retail Price Index "basket of goods" for the first time.

The office of National Statistics collects about 120,000 prices every month for a "basket" of about 650 goods and services, and the change in the prices of those items is used to compile the two main measures of inflation, the Consumer Prices Index and the Retail Prices Index.

The Bank of England uses the CPI as its inflation target while the RPI is used to calculate increases in pensions and some other state benefits.

Fruit smoothies are included to represent an emerging market for healthy soft drinks, and muffins represent snacks that people generally buy with a coffee in cafés.

By Ian Boughton