UK inflation unexpectedly jumps to 10.4%

by | Mar 22, 2023

Inflation unexpectedly pushed higher last month, official data showed on Wednesday, driven by the soaring cost of food.
The consumer price index was widely expected to ease, with analysts and the Bank of England forecasting it to fall to 9.9% from 10.1% in January.

But according to the Office for National Statistics, CPI in the 12 months to February rose to 10.4%.

On a monthly basis, CPI rose 1.1% compared to a rise of 0.8% in February 2022.

The largest upward contributions came from restaurants and cafes, which the ONS said was driven by increases in the cost of alcohol, as well as food, and clothing. Food prices soared by 18.2% over the year, the highest rate in 45 years.

Core inflation, which strips out the more volatile elements of food, energy, alcohol and tobacco, also rose sharply, to 6.2% from 5.8% in January.

CPIH, which includes owner occupiers’ housing costs, was 9.2% in the 12 months to February, up from 8.8% in January. It was driven higher by housing and household services, principally from electricity, gas and other fuels.

Last week, the Office for Budget Responsibility forecast inflation would fall to 2.9% by the end of this year, from a peak of 11.1% in October 2022.

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