Packs of tomatoes on display next to a sign advising that there is a shortage of them due to bad weather where they are grown, at a large supermarket in London, Tuesday, Feb. 28, 2023. Grocery price inflation has reached a record 17.1% to add a potential £811 to annual household shopping bills. This month marks a full year since monthly grocery inflation rose beyond 4% as consumers named it their second most important issue behind energy costs. (AP Photo/Alastair Grant)
LONDON (AP) – Britain’s inflation rate rose for the first time in four months in February, surprising an analysts and increasing pressure on the Bank of England to raise interest rates at its meeting on Thursday.
The consumer price index jumped to 10.4% in the 12 months through February from 10.1% the previous month, as high energy prices continued to squeeze household budgets, the Office for National Statistics said Wednesday.
While economists expect prices to drop rapidly later this year, inflation is more than five times higher than the Bank of England’s 2% target.
The central bank will weigh the need to control inflation against concerns about the fallout from global banking troubles when it decides whether to raise interest rates on Thursday. The bank has approved 10 consecutive rate increases since December 2021, pushing its key bank rate to 4%.
Michael Hewson, chief analyst at CMC Markets UK, said he expects the Bank of England to raise rates by at least a quarter of a percentage point.
“A base rate of 4% barely seems adequate to act as a drag on this measure of price rises and will still increase the pressure on the Bank of England” to raise rates on Thursday, Hewson said in a note to clients before the inflation figures were released.
