UK Inflation Rate At 3-1/2-Year High Of 2.3%


Consumer prices in the United Kingdom increased 2.3 percent year-on-year in February of 2017, above 1.8 percent in January and beating expectations of 2.1 percent. It is the highest inflation rate since September of 2013, boosted by rising fuel prices while food cost increased for the first time in 34 months.

Year-on-year, main upward pressure came from prices of transport (6.9 percent compared to 5.7 percent in January); housing and utilities (0.7 percent compared to 0.6 percent); recreation and culture (1.6 percent compared to 0.9 percent); restaurants and hotels (3.2 percent compared to 3 percent); food and non-alcoholic beverages (0.2 percent compared to -0.5 percent) and miscellaneous goods and services (1.1 percent compared to 0.8 percent). In contrast, cost of clothing and footwear edged down 0.1 percent (after being flat in January). 

On a monthly basis, consumer prices jumped 0.7 percent, following a 0.5 percent drop in January and above market expectations of 0.5 percent. The largest upward effect came from transport (1.2 percent compared to -0.6 percent in January), namely motor fuels, second-hand cars, sea and coach fares; recreation and culture (0.5 percent compared to -0.7 percent), namely personal computers including laptops and tablets; food (0.8 percent compared to 0.2 percent). 

The core index which excludes prices of energy, food, alcohol and tobacco increased 2 percent on the year, higher than 1.6 percent in the previous two months and above expectations of 1.8 percent. 

ONS | Joana Taborda | joana.taborda@tradingeconomics.com
3/21/2017 10:12:49 AM