Britain’s consumer price index (CPI), a measure of inflation, rose to 3.2 per cent in August from the previous year, the highest level in nearly a decade.
The UK’s Office for National Statistics (ONS) disclosed CPI data in a September 15 release, in which the agency said inflation growth is temporary, driven by base effects due to the government’s “Eat Out to Help Out” programme. Is. This, combined with the reduction in value-added taxes, saw huge price discounts in the restaurant sector in August 2020.
The British agency said the contribution of restaurants and hotels to the headline CPI number was by far the largest in the chain’s history.
“A number of price discounts were given in restaurants and cafes in August 2020 due to the government’s Eat Out to Help Out (EOHO) scheme, which allowed customers to eat or drink (up to the value of £10) in half for food or drink. price was offered. Monday and Wednesday,” the ONS said in a statement.
“Since the EOHO was a short-term plan, the upward change in the 12-month inflation rate in August 2021 is likely to be temporary,” the agency said.
The data shows that the last time the headline over-the-year CPI number of 3.2 percent hit a comparable level was in March 2012, when the gauge was at 3.5 percent.
The ONS noted that the year-on-year CPI jumped 1.2 percent from 2.0 percent to 3.2 percent in the 12 months during July, the biggest jump ever in the series’ 24-year history.
The August reading is well above the UK central bank’s target of 2 per cent and is likely to reinforce calls for a rollback of pandemic-era stimulus measures.
“High inflation will inevitably call into question the timing of monetary policy and interest rate hikes for the Bank of England to further mitigate inflation risks,” Yale Selfin, chief economist at KPMG UK, told Reuters.
“However, any tightening now runs the risk of stalling the recovery before it has a chance to take hold, so is likely to be delayed until the middle of next year,” he added.
On a month-on-month basis, the CPI rose 0.7 per cent from July to August after remaining flat from June to July.
British Health Secretary Sajid Javid, the former finance minister, said on Wednesday he thought the inflation jump was temporary, although it warrants closer observation for possible policy moves.
“I think I think it’s probably just a temporary increase,” Javid told BBC radio. “We are seeing an increase in inflation globally and this is something that, for any government, they need to look at in future spending plans.”
“It is very important to keep an eye on inflation,” he said.
In the United States, the comparable CPI inflation gauge fell to 5.3 percent in the 12 months through August, 0.1 percent below the figure for both June and July, marking the highest spike in the measure in 13 years.
Reuters contributed to this report.
This News Originally From – The Epoch Times