UK inflation rises on back of increase in clothing prices

UK inflation rose by more than expected in October, fuelled by an increase in clothing prices.

The Office for National Statistics (ONS) said the consumer prices index (CPI) rose to 0.7% in October from 0.5% a month earlier as clothing prices increased, returning to a more normal seasonal pattern after the disruption this year. City economists had forecast an inflation rate of 0.6% for October.

UK inflation picks up to 0.7% as clothing prices rise – business live

After steep discounting during the first lockdown as the rapid spread of Covid-19 forced consumers away from the shops, the ONS said prices rose in October at a similar rate to last year.

The cost of food also increased slightly last month, while the price of buying computer games and secondhand cars also rose amid increased demand, with people looking to reduce their reliance on public transport during the pandemic.

This was partially offset by falls in the cost of energy and holidays as travel companies attempted to lure weary British consumers to take an autumn break. The ONS said the government’s temporary VAT cut for the hospitality sector also continued to keep down the cost of hotel stays and eating out in restaurants.

The latest inflation snapshot comes as the second national lockdown in England triggers a sharp drop in footfall on the high street, with the number of visits to retail outlets plunging by 75% in the first week of November as restrictions were imposed. While online spending has boomed during the pandemic, with more people staying at home, spending in physical shops remains the biggest driver of retail sales.

Analysts said price rises would probably be subdued in future despite the increase in the inflation rate in October, as the second wave of coronavirus infections pushes the economy into a double-dip recession.

Tom Stevenson, an investment director at the fund manager Fidelity International, said: “While prices are on an upwards path, rises are likely to be subdued for a while longer. Covid infections are still increasing, large swathes of the UK are under strict lockdown rules, restricting opportunities to spend, and unemployment is climbing.”

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