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UK inflation falls but by less than expected in August

The UK’s restaurant subsidy scheme to support the hospitality sector through the Covid-19 pandemic helped to push the country’s inflation rate down to its lowest rate in almost five years, official data showed today. 

UK consumer prices rose by 0.2% in annual terms in August.

This was the smallest increase since December 2015 and a sharp slowdown from July’s 1% increase, the Office for National Statistics (ONS) said. 

A Reuters poll of economists had pointed to a reading of 0%. 

Last month discounts for more than 100 million meals were claimed through the government’s “Eat Out to Help Out” programme, which offered diners a state-funded price reduction of up to £10.

Prices in restaurants and cafes were down 2.6% compared with August last year, the first time they had been negative since records began in 1989, the ONS said. 

Falling air fares and a smaller-than-usual rise in clothes prices also helped to push annual inflation down. 

The ONS said eight items in its inflation basket were still unavailable to its price collectors.

It said they reflected the things that remain off limits to people in Britain such as tickets to the theatre and soccer matches, entrance to horse racing events and catering for more than 50 people. 

In April, during the most stringent period of the lockdown, 90 items had been unavailable.

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