UK inflation hits 30-year high of 6.2% as Sunak readies response
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Loading... - Thompson Holmes
- 23 Mar 2022
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British inflation shot up faster than expected last month to hit a new 30-year high, worsening a historic squeeze on household finances that finance minister Rishi Sunak is under pressure to ease in a budget update later on Wednesday.
The Office for National Statistics said consumer prices rose by 6.2% year-on-year in February after a 5.5% rise in January, its highest rate since March 1992.
Britain now has the second-highest annual inflation rate among Group of Seven countries, behind only the United States as global commodity and energy prices soar, exacerbated by Russia's invasion of Ukraine.
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The median forecast in a Reuters poll of economists had pointed to a reading of 5.9% and only three of the 39 respondents had expected such a strong reading.
The ONS highlighted household energy bills - up almost 25% on a year ago - and petrol as the biggest drivers of February's price jump.
In a blow to poorer households, the ONS said food prices were rising across the board, unlike in normal times when some prices typically go up and others fall.
Sunak will aim to show at 1230 GMT that he is helping Britons through the worst cost-of-living squeeze in decades.
Options include a fuel duty cut, pushing up the threshold at which people start to pay into the social security system and ensuring welfare payments keep up with inflation.
Yael Selfin, chief economist at KPMG UK, said the figures would also put pressure on the Bank of England to keep on raising interest rates, but she said it was still likely that price growth would peak before long. Read More…
