LIVERPOOL, UNITED KINGDOM – JANUARY 23: On the day Britain officially enters recession, shoppers walk through Liverpool city center on January 23, 2009 in Liverpool, UK. Figures released today confirm that the UK officially fell into recession for the first time since the early 1990s after GDP fell for two consecutive quarters of 2008.
Photo by Christopher Furlong / Getty Images
LONDON – Inflation in the UK hit an annualized 6.2% in February, its highest level since March 1992, as rising food, fuel and energy costs continue to exacerbate the crisis cost of living crisis in the country.
The February Consumer Price Index printout beat consensus expectations among economists polled by Refinitiv by an annualized 5.9%, and v.well above January’s 30-year high of 5.5%.
On a monthly basis, CPI inflation was 0.8%, exceeding expectations for a 0.6% increase and marking the largest monthly CPI increase from January to February since 2009.
The Bank of England raised interest rates at three consecutive monetary policy meetings, lifting borrowing costs from a historic low of 0.1% to 0.75%, as it looks set to curb runaway inflation without hindering economic growth.
The The Monetary Policy Committee adopted a more dovish tone compared with market expectations last week, highlighting a squeeze in household income amid a sharp rise in commodity prices following Russia Invades Ukraine. Policymakers now expect inflation to peak at 8% in the second quarter of 2022.
Spring declaration
British Finance Minister Rishi Sunak is under pressure to address the cost of living crisis when he delivers his Spring Statement late on Wednesday.
Plans for a 10% increase in National Insurance (a tax on income) stimulated many workers in April, while at the same time capping UK energy prices by 54% to accommodate with higher oil and gas costs, exacerbating household incomes. as consumer prices continue to head north and Russia’s war in Ukraine shows little sign of abating.
Paul Craig, portfolio manager at Quilter, said: “This morning’s inflation data shows just how dire the situation is and what action needs to be taken by the government to help save more people from falling into a predicament. financially when their wages are quickly swallowed up”. The investors.
“Markets and advanced economies are continuing to face high inflation coupled with uncertainty surrounding Russia’s war with Ukraine. Given the sensitive market environment, investors will need to. must closely monitor the data and the market and allocate accordingly.”
