UK inflation hits 30-yr high of 6.2pc

FE Team | Published: March 24, 2022 22:43:37

LONDON, Mar 24 (Reuters): British inflation shot up faster than expected last month to hit a new 30-year high, worsening a historic squeeze on household finances that finance minister Rishi Sunak is under pressure to ease in a budget update later on Wednesday.
The Office for National Statistics said consumer prices rose by 6.2 per cent year-on-year in February after a 5.5 per cent rise in January, its highest rate since March 1992.
Britain now has the second-highest annual inflation rate among Group of Seven countries, behind only the United States as global commodity and energy prices soar, exacerbated by Russia's invasion of Ukraine.
The median forecast in a Reuters poll of economists had pointed to a reading of 5.9 per cent and only three of the 39 respondents had expected such a strong reading.
The ONS highlighted household energy bills - up almost 25 per cent on a year ago - and petrol as the biggest drivers of February's price jump.
In a blow to poorer households, the ONS said food prices were rising across the board, unlike in normal times when some prices typically go up and others fall.
Yael Selfin, chief economist at KPMG UK, said the figures would also put pressure on the Bank of England to keep on raising interest rates, but she said it was still likely that price growth would peak before long.
"Provided inflation expectations can be managed and global commodity prices stabilise by next year, we should see inflation returning to the Bank of England's 2 per cent target by mid-2024," Selfin said.