UK inflation climbs to 0.5% in September

UK inflation was pushed higher last month as the end of the Government’s Eat Out to Help Out saw restaurant and cafe prices bounce back, according to official figures.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 0.5% in September from 0.2% in August.

It came as the Eat Out to Help Out discount scheme finished at the end of August, which had helped push inflation to its lowest level for nearly five years.

Jonathan Athow, deputy national statistician at the ONS, said: “The official end to the Eat Out to Help Out scheme meant prices for dining out rose during September, partially offsetting the sharp fall in inflation for August.

“Air fares would normally fall substantially at this time due to the end of the school holidays, but with prices subdued this year, as fewer people have been travelling abroad, the price drop has been less significant.

“Meanwhile, as some consumers look for alternatives to using public transport, there was an increased demand for used cars, which saw their prices rise.”

The September figure is used to decide the annual increase in business rates.

While retail, leisure and hospitality firms have been given a one-year business rates holiday, this is set to end on March 31 just before the new rate kicks in on April 1.

September’s CPI is also used in the calculation for state pensions, although the triple-lock rule means the payout will be the highest figure out of CPI, earnings growth for the year to July, or 2.5%.

State benefits are likewise decided by the September inflation figure, meaning payments will rise 0.5% next April, which is far less than this year’s 1.7% increase.