CPI jumps 10.4% in February up from a 10.1% hike the month before.
Salad shortages play a part in upward pressure on food prices – up 18%, a 45 year high.
Core inflation also on the up – rising 6.2% in February vs January’s 5.8%.
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK inflation figures “Thinking back just a few weeks when supermarket salad aisles were suddenly empty and people were willing to pay just about anything to grab the last red pepper, it maybe shouldn’t have come as such a shock that inflation has jumped up once again.
“After three months of successive declines the expectation had been for another slight fall in the headline rate as prices gradually trundle back towards that rather elusive 2% target. But the government’s narrative has just suffered a plot twist and it’s a twist that couldn’t have come at a more inopportune moment.
“After two weeks of instability on financial markets there had been growing expectation that the Bank of England may take a pause in its rate hike journey, and that can’t be ruled out, but today’s upward shift will be akin to popping a rooster into the henhouse.
“Some of the reasons for the inflationary spike are unseasonable and mostly unpredictable. Normally bars and restaurants wouldn’t have been fighting over themselves in January to dish up alluring offers designed to grab a bit of the consumer cash that hadn’t been spent over the Christmas period. Normally new year clothing sales would have given way to full priced spring lines before the twinkly lights were stowed away. But these aren’t normal times and retailers and hospitality venues used February to retrench.”
“There has been some good news, the price at the pump has fallen again and the cost of transport is also down. And whilst energy prices are still uncomfortably high compared with last year at least households don’t have to deal with the prospect of an increase at the end of the month, which should prevent an inflation spike in April.
“And reading across, producer prices are still falling primarily thanks to a fall in the price of oil. Wholesale gas prices and the cost of other commodities are also down, but there is a lag and that’s keeping things uncomfortable for both businesses and households trying to balance the weekly budget.”