‘Eat Out to Help Out’ scheme pushes UK inflation to near five-year low

(Reuters) – Britain’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 on Wednesday.

Consumer prices rose by 0.2% in annual terms in August, the smallest increase since December 2015 and slowing sharply from July’s 1.0% increase, the Office for National Statistics (ONS) said.

A Reuters poll of economists had pointed to a reading of 0.0%.

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 pounds ($12.89).

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.

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