Our index of key items being bought by households in recent months in preparation for and during the so-called lockdown rose four times the rate of the overall CPI inflation rate in March.
Dry pasta/spaghetti saw the most notable price increase in the index, rising 8.6% month-on-month in March. The cost of basmati rice increased 5.3% in the same timeframe, baked beans rose in price by 0.9% and toilet roll increased by 0.2%.
Other items included in the Ulster Bank Lockdown Index include liquid soap, bleach, canned tomatoes, cook-in sauce, and takeaway pizza.
Whilst there were notable price increases in March, some items actually fell in value in the month, such as liquid soap, which fell 0.9%. However this item was up 2.3% on the year.
The Ulster Bank Lockdown Index measures the prices of these key items currently in high demand by consumers using the CPI (consumer price inflation) measure of inflation. And whilst overall CPI rose 0.1% month-on-month in March, the Ulster Bank Lockdown Index increased 0.4%.
The shopping basket of items used in compiling consumer price inflation is reviewed each year, with some items taken out and some added in to make sure the measures are up-to-date and representative of consumer spending patterns. Consumer spending habits though have changed rapidly in recent weeks over a very short period of time due to measures introduced by government to ensure social distancing in the face of the pandemic.
Things like dry pasta, liquid soap and toilet rolls have been very high on consumers’ shopping lists, whilst some other items may have fallen off the list entirely. It is therefore perhaps unsurprising that we are seeing some volatility in the prices of items in high demand for a range of reasons and we think it is interesting and useful to track this currently and over the months ahead. Interestingly, despite the surge in demand for toilet rolls in March and supply difficulties, their price was 1.5% lower last month than the same month a year ago.
One thing consumers should bear in mind though is that CPI figures provide an average, and the prices consumers pay for items will vary depending on where they buy them. We would also assume that the intense fears that drove stockpiling in recent times have now passed given that supply chains have held up relatively well and demand from some of the items in the index will therefore settle to more normal levels over the months ahead.
Some other notable price changes reported in the latest CPI inflation figures include a year-on-year rise of 5.7% in the price of breakfast cereals and an increase of 11.3% year-on-year in the price of ice-cream. Meanwhile diesel was down 5.3% year-on-year and petrol prices fell 0.7% on the year.
Something which will be of interest to those working from home is that the price of internet access was up 7.5% year-on-year. That will be another one to watch in the coming months.