Beer falls out of the inflation grocery basket

PINTS of beer, theatre tickets and haircuts have been temporarily removed from the inflation basket because no one can buy them in lockdown.

Inflation fell to a four-year low of 0.8 per cent in April, down from 1.5 per cent in March, according to the Consumer Price Index published yesterday by the Office for National Statistics.

However, as vast swathes of the economy are effectively shut down during lockdown, the ONS said it has been difficult to accurately measure the cost of 90 “unavailable” items.

Roughly 80 per cent of the price quotes for the CPI basket are physically collected in stores at 140 locations.

The temporarily removed items are still reflected in the overall inflation figure, but price moves are based on seasonal estimates or on smaller-thanusual sample sizes. The ONS said this approach has a “neutral” effect on the overall figure.

Among the temporarily unavailable items are childminder costs, the price of a manicure and cinema popcorn.

The ONS said: “As the collection issues are likely to continue in subsequent months, we are continuing to monitor the resumption of services stopped during the lockdown period and we will consider how we will reintroduce items in the coming months.”

Transport costs and oil prices were two of the main contributors to the lower overall inflation figure, according to Laura Suter, an analyst at AJ Bell.

The market for air fares and secondhand cars has ground to a halt, while record drops in oil prices have pushed the price of petrol down by 10.4p a litre.

Clothes prices also fell as people have been unable to shop in stores and Ms Suter said this trend could continue post-lockdown.

She added: “There is already talk of large sales on the high street when shops can re-open in order to get rid of stock and draw customers back in.”

One of the biggest upward drivers of prices were for things like toys, games, crafting kits and computer games, as parents have sought to keep children entertained with schools closed.

The drop is good news for savers, with 376 deals now beating inflation compared to 65 last month when the CPI was 1.5 per cent, according to Moneyfacts, the analysts.

Rachel Springall, from the firm, said the optimism may not last long as providers could start to pull their best deals. “Inflation dropping to a fouryear low is good news to savers, for now at least, but savings rates are still being cut across the market,” she added.