Prices are rising at the slowest rate in five years, according to figures released following the conclusion of the recent Eat Out to Help Out initiative.
The initiative offered diners at participating restaurants throughout West Yorkshire 50% off their bill up to the value of £10.
It was seen by many as a major success, with local restaurants in Calderdale, Kirklees and further afield seeing table reservations skyrocket.
A handful of local eateries have even chosen to extend the scheme through, and fund the discounts themselves, in the hope of continuing to pack the tables.
But the scheme has had a knock-on effect on the UK’s inflation rate, which tracks the prices of goods and services. The rate fell to 0.2% in August, down from 1% in July.
A low rate of inflation is often great news for customers and those borrowing money, but it can have a negative impact on the finances of those with savings and pose challenges for small business owners.
Estimates suggest that more than 100 million meals were sold at half-price as part of the Eat Out scheme, which meant that prices in restaurants were lower than at the same stage last year.
It’s the first time since records began that a negative annual change has been recorded.
The reduction of the VAT rate for food and non-alcoholic drinks, from 20% to 5%, until 12 January next year has also had an impact on the marketplace.
The new figures are reflective of the almost unprecedented action taken by Chancellor Rishi Sunak and the UK Government in an effort to provide a shot in the arm to town centres and local economies.
With the Eat Out scheme now concluded and the cut in VAT set to expire in three months, inflation is predicted to remain lower than its 2% target, although this could be affected again by changes to the value of the Pound as Brexit talks continue.
For local business owners, there are fears that deflation and falling prices could lead to a fall in customer spending, especially on big purchases. This is due to people putting off buying larger items in the hope that prices will fall even further.
Cooper Accounting is working with small businesses throughout West Yorkshire to make sense of what’s unfolding economically.
We can help you plan for the future, and gain a greater understanding of the options and incentives available.
Get in touch for an informal chat.