Why computer games mean lower inflation in the UK


Computer games are driving UK prices lower.

Or at least, they've helped cut the headline inflation rate.

Consumer prices rose at an annual rate of just 1.7 percent in August.

That's the slowest rate since late 2016.

The Office of National Statistics said cheaper computer games were a big driver.

They're one of the products included in calculations of the inflation rate.

A slower rise in clothing prices also helped.

The numbers weren't a total surprise.

Bank of England policymakers predicted a slowdown amid cheaper oil prices.

But it was the sharpest monthly fall in about five years.

And that offers hope of a spending boost for UK households ahead of Brexit.

The sliding value of sterling is a big X-factor though.

That makes imports more expensive.

On Wednesday (September 18) the pound took a fresh hit, after the European Commission chief said he'd seen little progress on a Brexit deal:

(SOUNDBITE) (French/Latin) EU COMMISSION PRESIDENT, JEAN-CLAUDE JUNCKER, SAYING:

"There is nothing new under the sun. This means that the risk of a no-deal remains very real."

For all the slowdown in inflation, the Bank of England still expects to hike rates at some point.

It's worried about underlying price pressures.

But a messy Brexit could change its calculations.