Inflation rate in surprise jump to 10.4% amid record food costs
Prices rose unexpectedly in the UK last month after three consecutive months of slowing, driven by record food costs.
The Office for National Statistics (ONS) calculated inflation at 10.4% from January's 10.1% although it is still down from a 41-year high of 11.1% in October.
The rising cost of food and drinks, clothing and footwear as well as restaurants and hotels were the main factors blamed for the increase.
Read more: Bank of England poised to raise interest rates to 4.25% despite Credit Suisse chaos
This is the first rise in UK inflation in four months. Economists had forecasted that inflation would fall to 9.9% in February.
Annual inflation rates rise again following the easing in Jan 2023:
▪️ Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.2% in the 12 months to Feb 2023, up from 8.8% in Jan 2022
▪️ CPI rose by 10.4%, up from 10.1%
➡ https://t.co/VVfmybQmsG pic.twitter.com/l1dXAi7yyk
— Office for National Statistics (ONS) (@ONS) March 22, 2023
ONS chief economist Grant Fitzner said: “Inflation ticked up in February mainly driven by rising alcohol prices in pubs and restaurants following discounting in January.
“Food and non-alcoholic drink prices rose to their highest rate in over 45 years with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing.
“These were partially offset by falls in the cost of motor fuel, where the annual inflation rate has eased for some seven months.”
UK food and non-alcoholic drinks prices rose at the fastest rate in 45 years, jumping 18.3% in the year to February 2023, up from 16.8% in January, the ONS said.
That includes a 20.8% rise in bread prices, and a 28.6% surge in flour and other cereals. Pasta and couscous cost 25.3% more than in February 2022.
Meat was 16.3% more expensive, fish prices jumped 15.7%, while ‘milk, cheese and eggs’ were 30.8% pricier. Fruit prices rose 7.7%, while vegetables were 18% more expensive .
Chocolate was up 11.6% and crisps rose 16.1%. Ready meal prices were up 22.2%.
Read more: UK government borrowing hits February record on energy bill help
Danni Hewson, AJ Bell head of financial analysis, said: "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."
The rising costs of goods leaving factories and of raw materials were also reasons for the unexpected increase in inflation last month.
Chancellor Jeremy Hunt said: “Falling inflation isn’t inevitable, so we need to stick to our plan to halve it this year.
"We recognise just how tough things are for families across the country, so as we work towards getting inflation under control we will help families with cost of living support worth £3,300 on average per household this year."
The inflation data will be closely watched by the Bank of England ahead of its next interest rate decision on Thursday.
Watch: How does inflation affect interest rates?
Download the Yahoo Finance app, available for Apple and Android.