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Veg shortages drive surprise jump in UK inflation Veg shortages drive surprise jump in UK inflation
(34 minutes later)
The cost of living rose more than expected last month as salad and vegetable shortages helped push up food prices at the fastest rate in 45 years.The cost of living rose more than expected last month as salad and vegetable shortages helped push up food prices at the fastest rate in 45 years.
Alcohol prices in restaurants and pubs also drove up costs for households, as inflation jumped to 10.4% in the year to February from 10.1% in January.Alcohol prices in restaurants and pubs also drove up costs for households, as inflation jumped to 10.4% in the year to February from 10.1% in January.
Clothing costs, particularly for children and women, rose last month but fuel prices continued to fall.Clothing costs, particularly for children and women, rose last month but fuel prices continued to fall.
The surprise figures come ahead of a decision on interest rates on Thursday.The surprise figures come ahead of a decision on interest rates on Thursday.
The UK's central bank, the Bank of England, will decide whether to increase, lower or hold rates as it continues its battle to curb inflation.The UK's central bank, the Bank of England, will decide whether to increase, lower or hold rates as it continues its battle to curb inflation.
It has put up interest rates 10 times since December 2021, as it seeks to make borrowing money more expensive and encourage people to spend less, with the aim of stopping prices rising so quickly.It has put up interest rates 10 times since December 2021, as it seeks to make borrowing money more expensive and encourage people to spend less, with the aim of stopping prices rising so quickly.
To calculate inflation, which measures how prices change over time, the Office for National Statistics (ONS) tracks the prices of hundreds of everyday items.To calculate inflation, which measures how prices change over time, the Office for National Statistics (ONS) tracks the prices of hundreds of everyday items.
It said the continued rise in food costs had been a big factor in February's inflation figure, coming at a time when supermarkets were experiencing shortages of some salad items and vegetables.It said the continued rise in food costs had been a big factor in February's inflation figure, coming at a time when supermarkets were experiencing shortages of some salad items and vegetables.
Why are prices rising so much?Why are prices rising so much?
Five hacks to help save money on your food shopFive hacks to help save money on your food shop
How much are prices rising for you? Try our calculatorHow much are prices rising for you? Try our calculator
Tomatoes, peppers and cucumbers were among the goods affected as extreme weather in Spain and North Africa impacted harvests, and high energy prices hit growers in the UK. Problems with supply chains also contributed to the problem.Tomatoes, peppers and cucumbers were among the goods affected as extreme weather in Spain and North Africa impacted harvests, and high energy prices hit growers in the UK. Problems with supply chains also contributed to the problem.
Along with higher prices for milk, olive oil and eggs, the ONS said the shortages helped push food inflation to 18.2% - the highest since 1978.Along with higher prices for milk, olive oil and eggs, the ONS said the shortages helped push food inflation to 18.2% - the highest since 1978.
However, the agency added that so called "core inflation" - which strips out items such as food, energy, alcohol and tobacco which can fluctuate in price - increased from 5.8% to 6.2%, suggesting the price rises had been widespread. So called "core inflation" - which strips out items such as food, energy, alcohol and tobacco which can fluctuate in price - also unexpectedly rose jumping from 5.8% to 6.2%.
Until February inflation had fallen for three months in a row and the shock rise was "depressing", said ONS chief economist Grant Fitzner. However, he told the BBC the longer term outlook was "not quite as bleak".Until February inflation had fallen for three months in a row and the shock rise was "depressing", said ONS chief economist Grant Fitzner. However, he told the BBC the longer term outlook was "not quite as bleak".
He said UK inflation was set to fall this summer as energy prices come down. He said inflation was set to fall this summer as energy prices come down.
The inflation numbers are an unpleasant surprise for the markets, forecasters, the Bank of England and those in government hoping for a smooth path to their declared target of halving it by the end of the year. Lucianne Allen is sales and marketing director at Aubrey Allen, a wholesale butchers in Coventry which also has a retail shop in Leamington Spa.
UK inflation in February will be the highest in the G7, leaving us the only country still in double digits. She told the BBC that packaging and transport were two areas where costs had risen considerably.
But this will come as little surprise to consumers at the sharp end of relentlessly rising food prices and the recent vegetable shortages. "We've had to pass on some of that cost in the last 12 months, but we've absorbed some of it.
Inflation will still fall - it has to mathematically, as the biggest single component over the past years, domestic energy bills, rise by a smaller amount than in 2022. But it promises to be a bumpier ride than hoped. "I hope we've seen a peak [in price rises] but inflation continues to be very real and very present."
All this will complicate matters for the Bank of England, which will decide on whether to raise rates on Thursday. The Bank, and its US counterpart, the Federal Reserve, will be balancing concerns about stubborn inflation with fears over global financial stability. That balancing act just got more difficult. Inflation in the UK is higher than in most major developed economies. Chancellor Jeremy Hunt said slower price rises were "not inevitable".
Chancellor Jeremy Hunt said falling inflation rates were "not inevitable". "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," he added.
"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." Labour Shadow Chancellor Rachel Reeves said the latest figures showed that "nothing" in the UK economy was working better than it did before the Conservatives took office 13 years ago.
But Labour Shadow Chancellor Rachel Reeves said "nothing" in the UK economy was working better than it did before the Conservatives took office 13 years ago. Many economists had been expecting the Bank of England to hold rates on Thursday in light of recent fears over the stability of the banking sector, but following the inflation figures most expect a rise to 4.25% from 4%.
Economists had been expecting the Bank of England to hold rates on Thursday in light of recent fears over the stability of the banking sector. But many think it will now increase them from their current level of 4%.
Russ Mould, investment director at AJ Bell, said February's inflation figure was "pretty much the worst possible news" for the Bank's bosses.
"The Bank has two key roles - preserving financial stability and keeping a lid on inflation. To fulfil the former, it might have considered a pause on rates, after a crisis in the banking sector which had some uncomfortable echoes of events 15 years ago.
"However, the continuing surge in consumer prices means it can ill-afford any sort of let-up - unless it decides the uptick in inflation can purely be attributed to the salad and vegetable shortage which struck in February."
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