How the ONS Refreshes Its Inflation Shopping Basket to Keep Pace with What Britons Really Spend

The Office for National Statistics (ONS) has released its annual update to the inflation basket of goods and services for 2026, a crucial exercise that ensures the way Britain measures inflation accurately reflects what households actually spend their money on today.

This “virtual shopping basket” contains over 750 carefully selected items and services, from petrol and bread to streaming subscriptions and dental care. It forms the foundation of the Consumer Prices Index (CPI) and the Consumer Prices Index including owner occupiers’ housing costs (CPIH)—the key measures of inflation that shape everything from mortgage rates to wage negotiations across the UK.

The inflation basket review is not a routine administrative task. It’s a vital piece of economic infrastructure that ensures inflation figures remain relevant and representative. Consumer habits change. New products emerge. Entire industries transform. Without regular updates, the inflation measures could become distorted, reflecting a shopping basket that no longer bears resemblance to actual household spending.

Each year, the ONS removes items that have fallen out of favour or become obsolete, whilst adding goods and services that have grown in importance. A decade ago, for example, items like smartphones dominated baskets less prominently than they do now. Similarly, the explosion of subscription services—from streaming platforms to fitness apps—required inclusion in recent years to capture how Britons truly allocate their household budgets.

The review process is underpinned by comprehensive consumer spending data, including information from thousands of UK households. This ensures the weightings assigned to different categories reflect genuine spending patterns. Food and non-alcoholic beverages typically account for a significant proportion, as do transport costs and housing. But services, from healthcare to entertainment, have grown steadily as a share of household expenditure.

The timing of the 2026 basket update comes as inflation continues its downward trajectory. The CPI rose by 3.0 per cent in the 12 months to January 2026, down from 3.4 per cent in December 2025. This represents the lowest rate since March 2025. The CPIH, which includes owner occupiers’ housing costs, stood at 3.2 per cent, down from 3.6 per cent.

These falling inflation figures have been driven primarily by transport costs and food prices, both of which have eased significantly. However, services inflation remains stickier, standing at 4.4 per cent on the CPI measure. This reflects challenges in sectors including hospitality, professional services, and utilities—areas where wage pressures and supply constraints continue to push prices higher.

The updated basket will feed into February’s inflation figures, due to be published on 25 March 2026. By then, the second update of expenditure weights will have been introduced alongside the usual basket refresh, providing a clearer picture of how consumer behaviour has shifted across 2025 and early 2026.

For most people, inflation is tangible—it affects mortgage payments, rent, grocery bills, and fuel costs. Accurate inflation measurement matters because it informs decisions across the economy. The Bank of England’s Monetary Policy Committee targets 2 per cent CPI inflation when setting interest rates. Businesses use inflation forecasts to plan investment. Pensioners’ income protection depends on inflation-linked uprating. Public sector pay awards often reference inflation figures.

If the basket fails to reflect genuine spending patterns, inflation could be systematically over or underestimated, leading to interest rate decisions that are either too tight or too loose. This could leave borrowers worse off or savers poorly served.

The goods component of inflation currently sits at 1.6 per cent, substantially lower than services inflation. This spread matters because it reveals where price pressures really lie. Manufacturing and retail face competition and deflationary forces, whilst service providers—constrained by labour costs and regulatory requirements—struggle to moderate price growth.

The ONS describes the basket review process as one of “due diligence and continuous improvement.” Each item is scrutinised for relevance, statistical robustness, and representativeness. The process is transparent and guided by international standards, ensuring consistency with how other developed economies measure inflation.

As consumer behaviour continues to evolve—shaped by the cost of living pressures, technological change, and shifting priorities post-pandemic—keeping the inflation basket fit for purpose becomes ever more important. The 2026 update reflects the economy as Britons experience it today, not as it was five or ten years ago.

Key Takeaways

• The ONS has updated its annual inflation basket comprising over 750 goods and services to reflect current consumer spending patterns
• Items are regularly added and removed to ensure inflation measures remain accurate and representative
• The updated basket will influence February 2026 inflation figures, published on 25 March
• Current inflation stands at 3.0 per cent CPI, with services inflation notably higher than goods inflation at 4.4 per cent and 1.6 per cent respectively

What This Means for Kent Residents

For households across Kent, accurate inflation measurement directly impacts borrowing costs, savings returns, and household budgeting. As inflation continues to moderate—though services inflation remains elevated—the updated basket ensures that any future Bank of England interest rate decisions are based on reliable, up-to-date data reflecting what Kent families actually spend money on. Whether you’re tracking mortgage costs along the coast or managing a small business dependent on transport links through Dover and Folkestone, inflation figures influence your financial decisions. The ONS basket refresh is a reminder that economic statistics, though technical, have practical consequences for everyday life across the county.