UK inflation jumps to 2.3 per cent raising prospect of interest rate rise

The economists were right. For months now, they have been warning that the Brexit vote and the subsequent fall in the pound would drive up prices. Today’s figures from the Office for National Statistics confirm that consumer prices are rising at their fastest rate for more than three years. According to the ONS, the Consumer Prices Index (CPI) jumped to 2.3 per cent in February, up from 1.8 per cent in January and above the Bank of England’s 2 per cent target. Food prices recorded their first annual increase for more than two-and-a-half years, reaching 0.3 per cent higher in February than a year earlier. With the prospect of an interest rate rise now on the cards, households are facing the first real squeeze in their incomes for some time. With prices increasing faster than earnings (average earnings in January rose by just 2.2 per cent), this is bad news for people already struggling to get by.