British inflation rose to 0.5 per cent in September, official data showed Wednesday, as the UK government ended a meals discount scheme boosting the restaurant sector battered by the coronavirus pandemic.
The annual inflation rate, as measured by the UK’s Consumer Prices Index, increased from a near five-year low of 0.2 percent in August.
The ONS said that along with transport costs, “restaurant and cafe prices, following the end of the Eat Out to Help Out scheme, made the largest upward contributions” to inflation in September.
The “Eat Out to Help Out” incentive in August saw the UK government subsidising meals eaten also in pubs.
Britons enjoyed more than 100 million meals under the discount scheme, according to recent data.
Some analysts have argued that the measure may have fuelled cases of coronavirus.
Britain has suffered Europe’s worst death toll from Covid-19, with nearly 44,000 deaths, while the pandemic has caused the country’s deepest recession on record.
The extent of the financial cost was updated in separate official data Wednesday revealing that UK national debt last month hit a record £2.06 trillion ($2.65 trillion, 2.23 trillion euros)
That pushed state borrowing up to 103.5 percent of Britain’s annual gross domestic product, the ONS said.
The government borrowed £36.1 billion in September — £28.4 billion more than one year earlier.
With borrowing ballooning amid continued virus uncertainty, the UK Treasury on Wednesday said it was scrapping a multi-year spending review, replacing it with a one-year plan that will be outlined in November.
“In the current environment it’s essential that we provide certainty,” finance minister Rishi Sunak said in a statement.
“So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year,” he said, adding that long-term investments in the state-run health service, schools and infrastructure projects would remain.