Like any other long-standing and important statistical series, the CPI is reviewed from time to time to ensure that it continues to be relevant to current conditions. Over time, household spending habits change, as does the range of available goods and services. The CPI needs to be updated to take account of these changes. Regular reviews also provide an opportunity to reassess the scope and coverage of the index and other methodological issues.
The CPI was first compiled in 1960, with index numbers backcast to 1948. Since its inception in its current form in 1960, reviews of the CPI have usually been carried out at about five-yearly intervals. Following each review, which involves revising the list of items and their weights, the new series are linked to the old to form continuous series. This linking is carried out in such a way that the resulting continuous series reflect only price changes and not differences in the composition of the old and new baskets.
The current (14th Series) CPI reflects expenditure patterns derived mainly from the 1998-99 Household Expenditure Survey (HES) and has a reference base of 1989-90. It was introduced in the September quarter 2000.
In addition to revising weights to reflect new expenditure patterns, the 14th Series CPI introduced a new utility-based commodity classification to better address possible consumer substitution between commodities in response to relative price changes arising from The New Tax System.