United Kingdom Inflation August 2020

United Kingdom

United Kingdom: Inflation drops to lowest level in over four years in August

September 16, 2020

Consumer prices fell a seasonally-adjusted 0.42% over the previous month in August, contrasting the 0.45% rise recorded in July. August’s figure marked the first negative reading since April and was largely driven by falling prices in restaurants and hotels—arising from the government’s Eat Out to Help Out subsidization scheme—as well as lower clothing and footwear costs.

Inflation dropped to 0.2% in August, from July’s 1.0% rise and marked the lowest rate since December 2015. Annual average inflation inched down to 1.2% in August (July: 1.3%). Similarly, core inflation declined to 0.9% from the previous month's 1.8%.

FocusEconomics Consensus Forecast panelists expect inflation to average 0.8% in 2020, unchanged from last month’s forecast, and 1.5% in 2021.


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United Kingdom Inflation August 20 20

Note: Annual and monthly variation of consumer price index in %.
Source: Office for National Statistics (ONS) and FocusEconomics calculations.


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