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Lockdown computer gaming helps fuel rise in UK inflation

[LONDON] British inflation rose unexpectedly last month, spurred by rising prices for in-demand computer consoles during the coronavirus lockdown, as well as clothing, official data showed on Wednesday.

Consumer price inflation increased to 0.6 per cent in June from 0.5 per cent in May, the Office for National Statistics (ONS) said.

The average forecast in a Reuters poll of economists was for the rate to fall to 0.4 per cent. Only a few forecast an increase.

"It is possible that prices have been influenced by the coronavirus lockdown changing the timing of demand and the availability of some items, particularly consoles," the ONS said in a statement.

"However, it is equally likely to be a result of the computer games in the bestseller charts."

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Clothing and footwear prices almost held steady in June, a month which usually sees sales promotions, possibly reflecting how retailers cut prices earlier than usual this year to shift goods during the lockdown.

The ONS said 67 items used to compile the CPI were unavailable to consumers in June, or nearly 17 per cent of the basket, because of the effects of the lockdown. They included pints of lager in pubs, which remained closed in June, and haircuts.

Core inflation - which excludes typically volatile energy, food, alcohol and tobacco prices - rose to 1.4 per cent from May's 1.2 per cent. Economists had expected the rate to remain unchanged at 1.2 per cent.

Economists have said inflation running well below the Bank of England's 2 per cent target leaves the central bank under no pressure to rethink its huge stimulus push to help Britain's economy through the coronavirus crisis.


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