Inflation is at its highest rate for 20 years, according to figures from the Office for National Statistics (ONS).
Retail Price Index inflation (RPI), which includes mortgage interest payments, rose to 5.5 per cent from 5.1 per cent in January,its highest level for 20 years.
The UK Consumer Prices Index (CPI) annual rate of inflation has risen to 4.4 per cent, up from 4 per cent in January.
This was driven by higher food, fuel and clothing costs and was at the highest level for more than two years.
Domestic heating costs, particularly gas, rose by 0.4 per cent on average between January and February, despite falling by 2.8 per cent a year ago.
Clothing and footwear prices have also risen, where overall prices have shot up by 3.6 per cent following the January sales.
Overall transport costs rose by 0.8 per cent between January and February, pushed up by a 1.4 per cent increase in pump prices, following rises in the price of crude oil.
The CPI measure has now been one percentage point or more above the two per cent target for 15 months.
The CPI figure is the highest since October 2008, and will put pressure on the Bank of England to lift interest rates to curb accelerating inflation.
Other contributing factors included rising domestic heating costs, an increase in financial services costs as well as the higher cost of books and toys.
However alcohol and tobacco prices fell by 1.1 per cent - a record monthly fall - compared with 0.4 per cent a year ago. This follows a record monthly rise of 4.6 per cent between December 2010 and January 2011. Spirits fell by 5.8 per cent.
The overall increase in CPI to 4.4 per cent was more than had been forecast by economists.
Analyst Hetal Mehta, of Daiwa Capital Markets, told the BBC: “This pressure will no doubt intensify as higher commodity prices feed through in the coming months, taking inflation to around five per cent.”
However she suggested that a rise in interest rates should bring the rate of inflation under control.
"Provided that interest rates start to increase by 25 basis points (0.25 per cent) per quarter from August, in line with our expectations, then we believe inflation will average two per cent next year," she added.
The next publication is due on April 12.
View the original article here
Posted in: inflation
0 comments:
Post a Comment