The rate of inflation is 2.5%. But what does this mean? Every month 650 items in a typical consumer's 'shopping basket' are priced by the Office for National Statistics. The change in the average price of this basket is the change in the price level : inflation.
The basket's contents are changed every year to more accurately reflect what a 'typical consumer' spends their money on. This year muffins have been included to reflect a more 'cafe culture' and Top40 singles have been removed to show that we mostly download our music.
BBC NEWS | Business | Muffins enter typical UK 'basket'
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