You are here: Home - Investing -

UK inflation rises to highest level since May 2012

Written by:
UK inflation rose from 2.7% to 2.8% in February as rising energy prices pushed the reading to its highest level since May of last year.

The rise in CPI, in line with economists’ expectations, comes after four consecutive months of inflation standing at 2.7%.

The headline rate is the highest since May last year, when CPI inflation stood at 2.8%, down from 3% in April 2012.

Rising gas and electricity bills, coupled with price changes for petrol, air transport and some consumer goods, were the largest contributors to last month’s increase.

The largest downwards pressure came from smaller rises in food prices than were seen a year ago, and a fall in alcohol prices.

RPI inflation, meanwhile, dropped slightly to 3.2%, according to the Office for National Statistics. Consensus expectations had predicted RPI would remain at 3.3%.

The reading is the first since the UK Statistics Authority stripped RPI of its role as an official national statistic.

A new RPIJ measure, which uses a different calculation process, recorded inflation at 2.6% in February.

The new CPIH measure, meanwhile, which takes into account owner occupiers’ housing costs, rose from 2.5% in January to 2.6% in February.

“Inflation looks likely to rise further to a peak of about 3.5% over the summer, driven in part by rising food and petrol prices. And while it should ease back thereafter, the rise in import prices likely to result from the recent fall in the pound could slow that fall,” said Capital Economics’ chief UK economist Vicky Redwood.

After falling as much as 8% against the dollar this year, sterling strengthened slightly on the news, moving back towards $1.51.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Govt to unveil new tax-free childcare scheme

Some parents will be able to claim back up to a fifth of average annual childcare costs from the government...