The Census and Statistics Department announced a rebasing of inflation statistics at end-April, on the basis of the 2009/10 Household Expenditure Survey, an exercise conducted every five years. The survey showed an increase in the share of expenditure devoted to accommodation (rising to 31.7% of the basket, from 29.2% in 2004/05) and food (making up 27.5% of the basket, up from 26.9% five years earlier) but a reduction in spending on transport, clothing, utilities, durable goods and tobacco.

The rebasing of the series has had the effect of reducing historical rates of inflation. Consumer price inflation rose to 3.8% year on year in the first quarter of 2011, up from 2.7% in the fourth quarter of 2010, according to the new figures, whereas using the old base it rose from 2.8% to 4%. However, data continue to show an increase in inflationary pressure.

After 4.6% consumer price inflation in April, the government now estimates that inflation in 2011 will average 5.4%, up by almost 1 percentage point from its previous estimate. Rising inflationary pressure is putting pressure on wage settlements in Hong Kong. A recent survey of 184,000 employees showed private-sector salaries rising by 6-8% a year, leading to calls in the public sector for a 4-6% pay rise.