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The UK annual inflation figure hit its highest level since March 1992 as the country grapples with a cost of living crisis, data from the Office for National Statistics showed on Wednesday.
On an annual basis, the UK consumer price index rose by 6.2% in February, accelerating sharply from a 5.5% rise in January. The reading was higher than the market forecast, cited by FXStreet, of 5.9%.
UK CPI rose 0.8% monthly in February, having edged down 0.1% in January. The print exceeded the consensus estimate for a rise of 0.6%.
The ONS noted that UK inflation has risen sharply in recent months, driven by a broad range of items, with particular pressure coming from food, durables, consumer goods and energy.
The Bank of England raised interest rates for the third meeting in a row last week, as widely expected, in a bid to tame inflation.
However, the annual inflation rate remains well above the Bank of England's 2.0% target, as UK Chancellor of the Exchequer Rishi Sunak faces increasing pressure to take action over the country's cost of living squeeze.
The chancellor will present the latest updates from the Office for Budget Responsibility on the state of the UK economy and public finances as part of the spring statement later on Wednesday.
Colin Dyer, client director at abrdn, commented: ‘The Bank of England is suggesting inflation increases could hit double-digit figures later this year, and despite raising interest rates last week, the global nature of the issues causing it means this response is likely to only have a marginal effect on households.
‘Unless the chancellor has a silver bullet in the works, many will need to cut back on spending to get by, particularly those relying on their savings like retirees. For those that can, and would be comfortable with a degree of risk, now is a perfect time to explore other options for their savings, looking at what could provide a greater return in the long run. It might feel daunting to invest when the stock market is volatile, but the focus should be on the long-term benefits of investing, including the ability to achieve positive returns to counter inflation.’
Separately, the ONS on Wednesday said producer prices accelerated in February.
On an annual basis, the UK producer price index rose 10% in February, ticking up slightly from a 9.9% rise in January. The figure was in line with the market forecast.
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