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Monday, September 20, 2021

UK Inflation Hits Record High from Last Year’s Restaurant Discounts

Consumer prices in the United Kingdom surged to its largest ever recorded increase since 1997, bouncing back from a widespread discount scheme that drove down restaurant prices last year.

The U.K.’s Office for National Statistics (ONS) reported that restaurants, the hospitality sector, and food and drink prices largely contributed to pushing year-on-year inflation from 2.0 percent in July to 3.2 percent in August.

The rise of 1.2 percentage points in only a month was the sharpest increase since the ONS began its records in January 1997, surpassing economists’ forecast of a 2.9 percent inflation.

The ONS said that the increase was mainly caused by a low base effect from August last year when the government’s “Eat Out to Help Out” (EOHO) program drove down food and drink prices.

The widespread discount scheme offered half-priced food and drinks between Mondays and Wednesdays to encourage spending in restaurants and cafés.

Since EOHO was short lived, the ONS said that “the upward shift in the August 2021 12-month inflation rate is likely to be temporary.”

After months of incomplete data due to lockdown restrictions, the recent consumer price index accounted for all commodities after football admissions reopened in August.

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