What’s in your shopping basket?
The consumer price inflation is calculated by looking at the change in prices of a basket of goods and services.
Last year a number of new items have been introduced to represent specific markets where consumer spending is significant or growing and existing items in the baskets may not adequately represent price changes for such goods. For example, non-dairy milk drinks have been added reflecting the distinct and growing market for “Free From” foods. The item is intended to capture price movements for milk-type drinks based on, for example, soya or almond.
The reason inflation is important in financial planning is the implications over the long term particularly in retirement where inflation can erode the value of a pension pot. This is why working with Cotswold means we will factor this into your financial plans and talk through the options and implications, particularly when you are at the decumulation stage of your life (namely retirement). Read more here.