Soaring food prices push UK inflation to 10.4%



London
CNN

England Official data showed Wednesday as food inflation reached its highest level in more than 45 years, driving up the cost of visiting restaurants and hotels.

Soaring food prices It was 18.2% for the year through February, the sharpest rise since the late 1970s. The National Statistics Office Some salad and vegetable items were partially caused by shortages that led to rationing by supermarkets.

The unexpected rise in inflation in February follows months of deceleration since inflation pace was achieved. October’s 11.1% is the highest in 41 years.

The latest figures could make it more likely that the Bank of England will raise interest rates again at its meeting on Thursday.

Recent turmoil in the banking sector is expected to dampen economic activity as lending standards tighten. “The Bank of England may want to see hard evidence before it stops raising rates,” said Paul Dales, UK chief economist at Capital Economics.

“Although the situation is still very precarious, these figures should give us a little more confidence in our forecast that banks will raise interest rates from 4% to 4.25% tomorrow.”

But Samuel Toombs, chief UK economist at Pantheon Macroeconomics, said rising food and catering service inflation accounted for all of the rise in headline rates, both linked to higher fresh food prices due to poor harvests. said it does.

“This boost should wear off in the coming months,” he said on Twitter.

Shortages of some fruits and vegetables in the UK could last until May, one of the country’s largest groups of food producers told CNN last month.

Supermarkets and the UK government point to bad weather in main exporters Spain and Morocco as the main cause of the shortage. But farmers also blame very high energy costs, Brexit-related labor shortages and trade barriers.

Core inflation, which excludes volatile food and energy costs, also rose, rising from 5.8% in January to 6.2% in the year to February. Still, core inflation remains below the rate recorded late last year.

The data doesn’t just complicate central bank decisions about whether to raise rates for the 11th time in a row on Thursday. It will also make it harder for the government to deliver on his early January promise to halve inflation this year. Inflation in December he was 10.5%.

And the British are getting poorer and poorer. Wages in January rose 6.5% year-on-year, well below February’s inflation rate for the month and she.



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