ONS Confirms New Inflation Stats Approach, from March

In the UK, the Office for National Statistics (ONS) has given the final green light for the introduction of supermarket scanner data into headline consumer inflation statistics.

The new system, replacing physical price collection with supermarket checkout and online sales data for headline inflation statistics, has been developed and trialled over a number of years. The ONS previously employed price collectors to record 25,000 monthly price points, on mobile devices in shops, and will now use some 300 million price points derived from sales of over a billion units of products per month, taken directly from checkouts - according to a blog entry by Deputy Director for Prices Transformation Mike Hardie.

The data will not include information about any individual shopper, but should prove far more accurate than existing methods, and will provide new information such as the impact of store discount cards - 'the price charged at the till, not the price shown on the shelf, will feed into our inflation statistics.'

The new data source will be introduced in March, but initially will replace physical price collection for just half of the grocery market. Analysis of the past six years of data and comparison with samples using the new approach, suggests that it would have had little overall impact on headline inflation, reducing inflation by around 0.1 percentage points between 2022 and 2024, and almost identical for the periods either side.

From the summer, the organisation will also reintroduce its Shopping Prices Comparison Tool, on an expanded basis, showing more products and calculated on 'many more price points'; and additional collection days and increased sample for both hotel stays and computer games will improve stats for these two volatile sectors.

Hardie says this 'step-change' in the measurement of inflation is part of the ONS' broader plan to improve the quality of the country's key statistics.

DRNO first reported on the planned changes eighteen months ago.

Web site: www.ons.gov.uk .