UK inflation saw its largest jump since records began in August, as the rate spiked to 3.2% in a 12 month period, up from 2% year-on-year in July.
Despite the rate soaring past the Government’s 2% inflation target, the Office for National Statistics’ (ONS) claimed that this “is likely to be a temporary change”.
The ONS attributed this increase to depressed prices in August 2020 from the Government’s Eat Out to Help Out Scheme paired with previous reductions in VAT.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “August saw the largest rise in annual inflation month on month since the series was introduced almost a quarter of a century ago.
“However, much of this is likely to be temporary as last year restaurant and café prices fell substantially due to the ‘Eat out to Help out’ scheme, while this year prices rose.”
He added: “Food and non-alcoholic drink prices rose by more than last year, which also helped push up the rate. Rises in computer games prices, which are often erratic, also added upward pressure.”
According to the ONS’ consumer price index, transport made the largest upward contribution to the inflation rate of 0.87%.
This was joined by “large upward contributions” across the restaurants and hotels (0.65%), housing and household services (0.65%), and recreation and culture (0.28%) industries.