Streaming Services, Headphones Now Factor Into UK Inflation Math

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A traffic policeman in London's East End, circa 1970.

The growth of streaming services over the past several years has been widely reported, but now the distribution model has received verification from another, more unlikely source -- it has been added to the 'shopping basket' of goods and services that are used to calculate inflation in the United Kingdom.

Established in 1947, the Consumer Price Index (CPI) basket of goods is an annual list of typical everyday items that is used to measure changes in price of goods and services, which is in turn used by the Office for National Statistics to calculate consumer price inflation.

In its inaugural year, around 150 goods were included on the list, including perennial favourites bacon, milk, bread and tea, alongside less timeless products such as gramophone records, iron bedsteads and men's and women's hats.

This year there are 703 items in the CPI basket with music streaming services such as Spotify, Deezer and Rdio making the cut for the first time. Other new additions include E-cigarettes, online computer games subscriptions, headphones, craft beer, mobile phone chargers and covers, protein powders, melons and sweet potatoes.

In contrast, satellite navigation systems, yoghurt drinks and foreign exchange commissions have all been dropped from this year's list due to their falling popularity among British consumers.

"Music consumption has always been an important part of how people spend their discretionary time and income," Rdio CEO Anthony Bay tells Billboard. "So we are pleased to see the U.K. acknowledge the role streaming now plays by including it in the CPI."


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