UK inflation drops to lowest levels since 2016 and it’s because of video games

Those endless sales on the PlayStation Store are having an effect in the real world as the constant price cutting of games, some of them having their price slashed in half two weeks after launch, has contributed to the the UK’s Consumer Prices Index falling to below 2.1%.  A number of popular titles, such as Spyro, have launched in a lower price range which has also helped.

Here’s what the Office for National Statistics had to say about the move.

Within the group, the largest effect (of 0.09 percentage points) came from games, toys and hobbies (particularly computer games including downloads), where prices overall fell by 5.0% between July and August 2019 compared with a smaller fall of 0.1% between the same two months a year ago.

Price movements for games can often be relatively large depending on the composition of bestseller charts and the downward contribution between the latest two months follows a large upward contribution to the change between June and July 2019.

This has meant the UK’s inflation rate growth has been severely curtailed, which is a good thing. A higher rate of inflation means your money doesn’t go as far, and if wage growth is below inflation, which it was during the latter half of 2018, households can start to struggle. This latest dip in inflation has helped, with the latest figures showing wage growth 1.8% ahead of inflation.

When things are looking good the Bank of England’s Monetary Policy Committee (MPC) meets to decide if interest rates should be cut to encourage more spending, which would be good news for those with mortgages and credit card bills, and less than good news for those with savings.

That probably isn’t going to happen at this point. Pantheon Macroeconomics chief UK economist Samuel Tombs told the BBC, “The chance that the MPC follows other central banks and cuts bank rate this year remains slim, despite the sharp fall in CPI inflation in August.”

So, keep on snapping up those cut price video games, you’re helping your country!

Source: BBC /  Office for National Statistics

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