UK inflation hits record high

The UK’s consumer price index (CPI) has increased by 3.2% in the past 12 months to August 2021.

Diners enjoy drinks at a restaurant in London, responding to the UK government’s EOHO stimulus program. Photo: AFP

The above figures are provided by the UK Statistics Office official announced today 9/15. This is also the largest monthly increase in the history of UK inflation statistics, since January 1997.

Economists had previously predicted to Reuters that the UK inflation rate as of August would rise by around 2.9%, building on the index’s 2.0% increase in July.

The UK Statistical Office assessed that the record increase in inflation “may be just a temporary fluctuation”, and said that the UK government’s “Economically stimulating restaurant (EOHO)” program in last year could be the cause of the jump in inflation.

“In August 2020, restaurants and cafes have reduced prices in response to the EOHO program. Customers get half the price of food or drinks (available for sale). price up to £10) from over three days from Monday to Wednesday,” the UK Statistics Office said.

As the EOHO is a short-term program, the spike in inflation over the past 12 months through August 2021 may be temporary, the agency argued.

In fact, the newly announced inflation index is once again higher than the 2% target set by the Bank of England and will certainly pressure those calling for an end to the pandemic stimulus packages. .

Inflation increased in the context of energy prices in the UK climbing this month and the country continued to reopen after strict anti-epidemic blockades.

From a research perspective, Mr. Samuel Tombs, chief economist at the economic consulting firm Pantheon Macroeconomics (UK), said that the price of used cars new was the cause of the UK’s sudden rise in inflation.

UK core inflation in August was higher than monthly average mainly due to a 4.9 per cent jump in used car prices, Mr. Tombs cited. However, the expert does not expect core inflation to increase further in September, as prices at restaurants have recovered to levels in the same period last year.

But a ceiling on energy prices and a tax hike on the tourism industry could push up UK inflation at the same time in October.