While food and alcohol prices rose and helped push inflation higher in February, there was a slower rise in retail prices
According to the Consumer Prices Index (CPI), the rate of prices changes rose to 1.9% in February, from 1.8% in January. With house prices rising at their slowest rate for almost six years now, and rising food and alcohol prices being offset by slower price rises in clothing and footwear, inflation overall is “stable”.
With prices for food and non-alcoholic beverages going up from January to February this year, as well as those for tobacco, the inflation rose this year, compared to the same period last year. The Office for National Statistics says:
“Rising prices for food, alcohol and tobacco, and across a range of recreational and cultural goods produced the largest upward contributions. The largest, offsetting, downward contribution came from clothing and footwear, with prices rising between January and February… but by less than between the same two months a year ago.”
According to economists, inflation will keep on rising in the UK due to rising of prices in many fields, like domestic energy and imported raw materials. Ruth Gregory, senior UK economist at Capital Economics said February’s rise marked “the start of an upward trend which could see inflation reach 2.5% by April”, which is 0.5% higher than Bank of England’s 2% target level.
Meanwhile, UK house prices rose by an annual 1.7% in January, according to the Office for National Statistics, with a lower rise due to a 1.6% fall in London house prices. Jamie Durham, economist as PwC said:
“This decline is driven by ongoing uncertainty around Brexit – London has been particularly affected due to its integration with the rest of Europe. London is not the only area with falling prices. House prices in the East of England also fell on an annual basis for the first time since October 2011, and declined by -0.2%. Elsewhere in the UK, strong positive house price inflation continued in the Midlands, and particularly the East Midlands. The North West and Yorkshire and the Humber also showed strong annual house price growth, 0f 3.4% and 2.9% respectively.”