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Eat out to help out scheme pulls UK inflation down to 0.2% – business live | Business

The fall to 0.2% is overwhelmingly the result of the impact of Eat Out to Help Out and the temporary VAT cut for the hospitality sector.

It is a statistic that reaffirms what we already know, but also reflects some freakishly temporary factors. The chancellor’s restaurant subsidy scheme is already over, the VAT cuts expire in January.

Inflation is likely to remain lower than its 2% target, except in the case of a further sharp fall in the value of the pound – for example, after a disorderly end to the post-Brexit trade talks. Either way, the Bank of England has more space for extra support to the economy in the coming months, without risking a surge in inflation.

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Written by Owais Khan

I am an Artificial intelligence engineer and data scientist.

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