Takeaway coffee and fitness classes return to UK inflation data as lockdown eases

(C) Reuters. FILE PHOTO: People observe social distancing rules outside Climpson & Sons coffee shop in Hackney

By David Milliken

LONDON (Reuters) – Haircuts, holidays and a pint at the pub remain off limits but prices for takeaway coffees, muffins and fitness classes have returned to Britain’s inflation data, giving a picture of how the coronavirus lockdown is easing.

Headline year-on-year inflation was 0.5% in May, the lowest since 2016, but of equal interest was the insight into slowly normalising spending habits.

With more cafes offering takeaway sales, statisticians were once again able to collect prices for slices of cake, muffins, tea and coffee to go. Slimming club memberships and exercise classes – mostly online – also became available in May.

In other signs of life returning to normal, Britain’s Office for National Statistics was back to checking hourly rates of plumbers, electricians and decorators, as well as the cost of an annual booster injection for a medium-sized dog.

Even so, around one in seven of the prices that the ONS would normally check was unavailable last month.

Most of the missing prices were in the travel and hospitality sectors, including beers, wine and spirits in pubs, as well as foreign travel and trips to cinemas, museums and bowling alleys.

For prices it cannot find, the ONS uses estimates based on trends a year ago. An alternative inflation measure, which strips out unavailable goods, showed inflation 0.1 percentage points lower than the headline measure in May.

Inflation has fallen sharply since the lockdown started. May’s headline rate was a four-year low, largely due to a global fall in oil prices.

A fall in the cost of toys and games – after they spiked in April due to demand from families cooped up at home – also lowered inflation last month.

But food prices are rising, and it looks as if people snacking at home are partly to blame. Crisps, peanuts, chocolates and cakes were some of the items for which prices rose fastest in May.