For the first time in 2020, UK inflation has increased as a result of the rising price of games consoles during the coronavirus lockdown as well as few summer sales. The Office for National Statistics said the consumer price index (CPI) measure of inflation grew from 0.5% in May to 0.6% in June. The core rate, which discounts volatile energy and food prices, grew to 1.4%.

City economists had previously expected the inflation rate to fall to 0.4% given a lack of consumer demand. The ONS said that impact of the coronavirus crisis had been felt in a price increase in computer games and consoles, yet food prices had fallen. In general, though, inflation has fallen during the pandemic due to global oil prices decreasing and businesses closing. With oil prices starting to increase again and businesses, including shops, restaurants and pubs reopening, experts don’t expect the cost of living to greatly increase.

“We suspect that after the initial release of pent-up demand once non-essential retailers opened in mid-June, retailers will have to use heavier discounts to get people through the doors,” Paul Dales, the chief UK economist at the consultancy Capital Economics said.

Video game and streaming sales have exploded during the pandemic. From the fourth quarter of 2019 to the first quarter of 2020, the streaming platform Twitch surpassed three billion hours watched for the first time, according to a report from the software service Streamlabs.

Although sales increased, manufacturing came to a standstill during the lockdown. Video game developers and gaming console manufacturers have struggled to operate with closed offices and factories. There are still many questions as to how the gaming industry will contend with the release of new products this year.

In particular, the release of new consoles from Sony and Microsoft, who are expected to release the next PlayStation and Xbox this fall, events that occur only every seven or eight years, has been questioned. Although the releases are said to be unaffected, it remains to be seen how the pandemic will evolve and how demand will be effectively met.

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