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Eat Out to Help Out scheme sees inflation fall to near five year low

Eat Out to Help Out scheme sees inflation fall to near-five year low

Last month’s Eat Out to Help Out scheme and the Government’s VAT cut helped push UK inflation to its lowest level for nearly five years in August, according to official figures.

The Office for National Statistics (ONS) said the Consumer Prices Index tumbled from 1% in July to 0.2% in August – the lowest rate since December 2015.

Chancellor Rishi Sunak’s popular Eat Out to Help Out discount last month to encourage people to eat out again after lockdown was the biggest driver in pushing down the rise in the cost of living by slashing prices in restaurants and cafes.

The ONS also said the cut to value added tax (VAT) on hospitality and tourism from 20% to 5% helped lower inflation.

It added that air fares fell in August for the first time on record as the pandemic saw more Britons holiday in the UK this summer.

Clothes prices also fell back as retailers held off from rising prices for the usual autumn selling season.

Jonathan Athow, deputy national statistician at the ONS, said: “The cost of dining out fell significantly in August thanks to the ‘Eat Out to Help Out’ scheme and VAT cut, leading to one of the largest falls in the annual inflation rate in recent years.

“For the first time since records began, air fares fell in August as fewer people travelled abroad on holiday.

“Meanwhile the usual clothing price rises seen at this time of year, as autumn ranges hit the shops, also failed to materialise.”

Published: 16/09/2020 by Radio NewsHub

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