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UK inflation hit a near five-year low in August, the Office for National Statistics (ONS) said Wednesday.
August’s Consumer Price Index 12-month rate fell to 0.2% in August, down from 1% in July.
The drop was partly fueled by the government’s Eat Out to Help Out scheme, which slashed prices for dining out at restaurants and cafes, the ONS said.
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UK inflation hit a near five-year low in August, in part thanks to a government scheme that cut the price of dining out.
The Office for National Statistics (ONS) said the Consumer Price Index (CPI) 12-month rate was 0.2% in August, down from 1% in July.
It is the lowest reading since December 2015.
The ONS said the government’s Eat Out to Help Out scheme, which gave diners 50% off food up to a cap of £10 during August, contributed to the rate falling. Other downward contributions came from reduced air fares and the falling price of clothes.
The results come after UK unemployment rose to a two-year high of 4.1% in August, up from 3.9% in the previous three-month period.
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“The UK has dodged a deflationary bullet and avoided the fate of the Eurozone, which slipped into deflation of 0.2% in August,” said Richard Berry, founder of goodmoneyguide.com.
The Bank of England’s Monetary Policy Committee is due to announce its next interest rate decision on September 17, and most market watchers expect August’s inflation reading to have limited impact on the central bank’s policy-making.
“As a result the Bank of England is unlikely to be bounced into knee-jerk action at this week’s Monetary Policy Committee meeting,” Berry said. “The prospect …read more
Source:: Business Insider