Eat Out to Help Out pushes inflation to five-year low

The Eat Out To Help Out scheme pushed the UK's inflation rate to a five-year low in August as restaurant prices fell.

Last month's Consumer Prices Index (CPI) fell to 0.2%, down from 1% in July.

The cut in VAT for the hospitality sector from 20% to 5% was also a factor, the Office of National Statistics (ONS) said.

Prices in restaurants and hotels fell 2.8% compared to August 2019, their first decline in the category since records began in 1989.

More than 100 million meals were claimed through the Eat Out To Help Out discount scheme, which ran throughout August.

Consumers were able to claim a 50% discount on meals out, up to a maximum of £10 for each diner, subsidised by the Government.

"The cost of dining out fell significantly in August thanks to the Eat Out to Help Out scheme and VAT cut, leading to one of the largest falls in the annual inflation rate in recent years," said ONS deputy national statistician Jonathan Athow.

"For the first time since records began, air fares fell in August as fewer people travelled abroad on holiday.

"Meanwhile, the usual clothing price rises seen at this time of year, as autumn ranges hit the shops, also failed to materialise."

The ONS said drops in the price of airfares and clothing were unprecedented for August, which is usually the peak of the busy holiday season.