The way key economic data is collected is changing – here’s why it matters to you
The Office for National Statistics (ONS) is making major changes to how it gathers data that shapes decisions on wages, benefits, and public spending.
One of the biggest shifts involves how inflation is measured, which is changing today.
The Consumer Price Index (CPI), which tracks the cost of everyday essentials like food, energy, and transport, is being updated with a new system that aims to capture price changes more accurately.
This matters because inflation figures influence the Bank of England’s decisions on interest rates, which in turn affect the cost of borrowing, savings, and even rent.
For workers, inflation also plays a role in wage negotiations. This is because when prices rise, there’s often pressure on employers and the government to increase salaries, pensions, and benefits.
The ONS will continue sending researchers to shops to check prices and speak to retailers, but from this month, a new digital system will speed up how the data is processed.
It’s also testing a new method using real checkout data from supermarkets. Instead of just recording shelf prices, it will track what people actually pay, including discounts from loyalty schemes like Clubcard and Nectar.
This should give a more accurate picture of real spending habits, with full rollout expected by 2026.
The change has been brought about over concerns the previous method measured price changes but failed to capture how consumers changed what they buy as a result.
Take the example of butter, which has gone up in price by 18% in the past year.
That increase was reflected in the CPI, influencing the overall inflation figure. However, many consumers will have switched to a dairy spread or margarine rather than keep paying for the more expensive butter.
While this should improve inflation accuracy, tracking individual product prices may become harder.
Other changes are being introduced due to concerns over reliability, including job figures, GDP estimates and migration data.
Read more about them here…
