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‘Bankerisation’ of the UK consumer price basket

Representative basket of goods on the trading floor

Representative basket of goods on the trading floor

The Consumer Price Index is the UK government’s chosen index when it comes to maintaining inflation at 2%. The way the index is determined is therefore crucial to the framing of UK monetary policy. As of today, the basket has been selectively restructured in favour of the spending habits of persons working in the City of London.

A press release from the Office of National Statistics reveals that the CPI now includes:

1.  The fresh fruit snacking pot:  found in Pret-a-Manger and other banker-friendly takeout places

Pret a manger

2. Hand car washing facilities: found near high-end City and Canary Wharf parking areas

Wharfside

3. Interchangeable lens digital cameras: popular among visually-literate 20-30-something banking professionals 

Detachable lens cameraAt the same time, takeaway coffee has been dropped from the basket, leaving only lattes to carry the burden of price increases in the mobile caffeine sector.

Less promisingly for Stephen Hester people in the City, gardeners’ fees have been eliminated. So has the price of hardwood flooring, the latter being less common since the downturn according to the Office of National Statistics. Men’s clothing hire has been added in. So, inexplicably, has wild bird seed.

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