The UK’s inflation rate rose to 0.6% during June, with the clothing and gaming industries mostly being responsible for the first rise of 2020.
The Consumer Prices Index (CPI) managed to rise from May’s 0.5%, according to the UK’s Office for National Statistics (ONS).
May’s figure was the lowest inflation rate in four years.
However, whilst this increase is promising, inflation still remains below the Bank of England’s target of achieving a 2% inflation rate.
Deputy National Statistician for Economic Statistics at the ONS, Jonathan Athow, claimed that “The inflation rate has increased for the first time this year, but remains low by historical standards.”
He also added that because of COVID-19, “clothing prices have not followed the usual seasonal pattern this year, with the normal falls due to the starts of the start of the summer sales failing to materialise.”
The UK’s online fashion retailer, ASOS, stated on Wednesday that during the four months up till June 30, sales rose by 10%, as store-based rivals were forced to close their shops whilst online shopping was at its peak.
Apart from this, he also stated that “Prices for computer games and consoles have risen, but food prices, particularly vegetables, have fallen.”
During the COVID-19 pandemic, inflation fell very drastically, with consumer demand also falling, both due to a lack of consumer income, as well as a result of the closing of several stores.
In June, men’s clothing rose in price, with such increases coming “across almost the full range” according to the ONS.
Adding to this, the ONS also said that women’s clothing increased in pricing, but had a “more mixed picture across the different products.”
However, the biggest contribution to the rise in inflation was because of games, toys and hobbies, more specifically videogames and videogame consoles.
The ONS added that “It is possible that prices have been influenced by the coronavirus lockdown changing the timing of demand and the availability of some items, particularly consoles.”
Paul Dales, the chief UK economist at Capital Economics, claimed that this small rise in inflation was unlikely to be maintained, with deflation being just “around the corner”.
Dales also added that “In fact, by July or August, CPI inflation may have fallen below zero.”
He also stated that “It will be a few years before the economy is strong enough to raise inflation to the 2% target.