Inflation in the U.K. reached a new three-decade high in February, accelerating to a 6.2% annual rate, and is expected to rise further in the coming months on higher energy and other commodity prices.
This is the highest rate since March 1992 — when prices rose at an annual pace of 7.1% — and beats the 6.0% rate expected by economists polled by The Wall Street Journal. In January, consumer prices increased 5.5% on year, according to the data from the Office for National Statistics.
The pick-up in inflation was led by higher prices of food, clothing, and furniture and household equipment, as Covid-19 lockdowns meant that price changes were unusually weak in February 2021.
The core price index, which excludes volatile categories such as energy costs and food, rose 5.2% in February on year, accelerating from the 4.4% increase registered in January.
Economists expect inflation to keep rising in the months ahead, as the jump in energy prices feeds through households’ utility bills, and with the war in Ukraine exacerbating price pressures.
The Bank of England has already raised its policy rate three times in recent months to tame price growth. The central bank expects the inflation rate to be around 8% in the second quarter, and perhaps even higher later this year.
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