UK Inflation Increased to 10.4%

BUSINESS

Inflation in the United Kingdom unexpectedly rose in February as household expenses for food and energy continued to rise. The annual increase in the consumer price index (CPI) was 10.4%, higher than the 9.9% predicted by economists in a Refinitiv poll and up from 10.1% in January. CPI inflation exceeded expectations of 0.6% on a monthly basis, reaching 1.1%.

Restaurants and cafes, food, and clothing made the largest upward contributions to the monthly change in both the CPIH and CPI rates, according to the UK Office for National Statistics. Recreational and cultural goods and services (particularly recording media) and motor fuels made a smaller contribution.

In the year to February 2023, the Consumer Prices Index (CPIH), which includes the costs of housing for owner occupiers, increased by 9.2%, up from 8.8% in January. Since October 2022, when prices hit a 41-year high of 11.1%, the unexpected rise in February marked a break from the pattern of slowing price increases for the previous three months.

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British households continue to face high energy and food costs, and workers in a variety of industries have gone on strike in large numbers in recent months due to disagreements over pay and working conditions.

In an address to the House of Lords Economic Affairs Committee, UK Finance Minister Jeremy Hunt emphasized that the government’s top priority remains lowering inflation from its current “dangerously high” levels.