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Inflation bounces higher on more expensive clothing and video games

UK News | Published:

A consensus of economists had predicted that inflation would stay flat at 0.5% for the month.

Shoppers in Princes Street, Edinburgh

UK inflation bounced higher in June on the back of clothes and video game price rises as the coronavirus crisis halted normal summer discounting patterns.

The Office for National Statistics (ONS) said the rate of Consumer Price Index (CPI) inflation increased to 0.6% for the month, from 0.5% in May

A consensus of economists had predicted that inflation would stay flat at 0.5% for the month.

UK inflation rate
(PA Graphics)

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The inflation rate has increased for the first time this year, but remains low by historical standards.

“Due to the impact of the coronavirus, clothing prices have not followed the usual seasonal pattern this year, with the normal falls due to the start of the summer sales failing to materialise.

“Prices for computer games and consoles have risen, but food prices, particularly vegetables, have fallen.”

Economists said that price increases for toys and games were a particular driver for the return to inflation growth, with price rises for computer games and consoles.

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Pay growth v inflation
(PA Graphics)

Prices across the category grew by 1.8%, compared with a 4.7% fall a year ago, as the virus had an impact on demand and availability of some games.

Clothing prices also contributed to the increase in inflation as prices did not slump in the usual seasonal pattern as the pandemic affected summer sales, the ONS said.

Health products also contributed to the increase, as the price of pharmaceutical products rose by 1.7% for the month.

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It said this was driven by products such as cough liquid and daily disposable contact lenses.

Meanwhile, the prices of food and non-alcoholic drinks fell by 0.6%, as the price of vegetables and crisps tumbled.

The Retail Price Index (RPI), a separate measure of inflation, was 1.1%, up from 1% the previous month.

Meanwhile, the CPI including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 0.8% last month, up from 0.7% in May.

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