Surprise jump in UK inflation again to 10.4%

Highest food prices since 1977

The cost of living rose unexpectedly again last month as food prices increased at the fastest rate since 1977/78

Alcohol prices in restaurants and pubs also increased, as inflation jumped to 10.4% in February from 10.1% in January year to year

Clothing costs, particularly for children, jumped last month but fuel prices continued to fall. The surprise figures come ahead of a decision on interest rates due from the Bank of England on Thursday 23rd March 2023.

Fly-away inflation

The Bank of England (BoE), will decide whether to increase rates as it continues its battle to curb inflation. It’s probably not a case of will the BoE increase rates but more about by how much.

An increase of 0.5% has been muted but a 0.25% is more likely. The EU and U.S. increased rates recently by 0.50% and 0.25% respectively.

Interest rate up 10 times in 15 months

The Bank of England has increased interest rates 10 times since December 2021, as it seeks to make borrowing money more expensive and encourage people to spend less, with the aim of stopping prices rising so quickly.

It’s a double whammy for the public – interest rates are up to curb inflation, and prices are up as inflation increases. The public get stung either way you move.

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