A drop in the price of video games is thought to be one of a number of factors contributing to a fall in inflation in the UK, sending it tumbling to its lowest level since 2016.
In a report by the Office for National Statistics (thanks, Eurogamer), the drop in inflation is attributed chiefly to “recreation and culture” spend in July and August, which is thought to have reversed the previous upward contribution we saw earlier this year.
The fall in prices – reported as a drop of 5 per cent between July and August 2019 compared with a smaller fall of just 0.1 per cent across the same period a year ago – has slowed inflation to 1.7 per cent.
“The largest downward contribution (of 0.15 percentage points) to the change in the CPIH 12-month rate came from recreation and culture,” the report states. “This more than reverses the upward contribution of 0.08 percentage points seen between June and July this year. 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. There was also a downward effect from cultural services, with prices rising by 0.2% between July and August this year compared with a larger rise of 2.9% between the same two months a year ago. The largest contributions came from admissions to live music events and theatres.”
This isn’t the first time games have impacted on UK finances. Back in 2014 the opposite happened and the increased cost of next-gen gaming was so influential on the UK economy, it boosted British inflation.
“Smaller falls in transport costs than a year ago – notably for motor fuels and air fares – and price rises for computer games were the main contributors to the rise in the rate of inflation,” the ONS said at the time.