Throughout 2025, the rate of inflation, measured by the Consumer Price Index (CPI), remained volatile, consistently staying above the target of 2.0%. Supply chain reconfigurations and the rapid adoption of eco-friendly technologies driven by carbon-reduction policies became key drivers of structural price shifts. The cost of traditional fossil-fuel energy and carbon-intensive goods rose, placing a disproportionate burden on lower-income households whose budgets are dominated by basic utilities.
In response, consumers rapidly adjusted their spending habits, substituting traditional options with cleaner, more energy-efficient alternatives. Recognizing these swift behavioral changes, the national statistical office updated the representative basket of goods and services. Technological advancements in electric mobility and a significant shift in dietary habits towards sustainable plant-based options meant that maintaining the old basket would lead to an unrepresentative measurement of the cost of living. Regular revisions ensure that the CPI remains an accurate reflection of actual household expenditure, preventing policy decisions based on distorted inflation data.
| IN | OUT |
|---|---|
| Electric vehicle home charging units | Petrol lawnmowers |
| Plant-based meat alternatives | Canned corned beef |
| Smart home thermostats | Incandescent light bulbs |
| E-bike subscriptions | Public phone cards |
Using the information provided in Extract B and Figure 1, explain one reason why the national statistical agency must regularly update the CPI basket of goods and services.
