Price cutting by clothing and footwear retailers and cheaper electronic goods helped push down the annual rate of UK inflation by more than expected last month, from 2.5% to 2%, according to official figures, APA reports citing The Guardian.
The return of the traditional summer sales after the hiatus last year caused by the coronavirus pandemic was a factor in bringing the government’s main measure of the cost of living back to its target rate, the Office for National Statistics (ONS) said.
Smaller discounts were on offer in 2020 when retailers were seeking to maximise sales after the prolonged spring lockdown of the economy. The earlier easing of restrictions during 2021 has meant a more normal pattern of July bargains has resumed, although the 2% drop in the cost of clothing was smaller than the discounts recorded in pre-crisis years.
The ONS said there had also been a fall in the cost of recreation and culture, a category that includes computers, recording equipment, computer games, toys and package holidays.
The drop in consumer prices inflation – the first since February – was bigger than expected by economists polled by Reuters, who had pencilled in a drop to 2.3%. Core inflation, which strips out energy, food, tobacco and alcohol, dropped from 2.3% to 1.8%.
The Bank of England believes the respite is likely to be temporary and is forecasting an inflation rate of 4% by the end of the year.
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