2021
The Office for National Statistics (ONS) recently released its inflation figures for February 2021, showing a 10.4% increase in the Consumer Prices Index (CPI). This marks the highest inflation rate since March 2012, when it reached 5.2%.
The ONS attributed the rise in inflation to the increase in prices of recreational and cultural goods and services, such as holidays, computer games, and theatre tickets. This was partially offset by a decrease in the prices of clothing and footwear, as well as food and non-alcoholic beverages.
The Bank of England has set an inflation target of 2%, and this latest figure is well above that target. This could lead to an increase in interest rates, which could have a negative effect on the economy.
The ONS also reported that the Retail Prices Index (RPI), which includes housing costs, rose by 4.5% in February 2021. This is the highest rate since June 2014, when it reached 4.6%.
The ONS said that the rise in RPI was mainly due to increases in the prices of housing, water, electricity, gas and other fuels, as well as furniture and household goods. This was partially offset by a decrease in the prices of clothing and footwear.
Overall, the ONS reported that the CPI and RPI both increased in February 2021, with the CPI rising to 10.4% and the RPI rising to 4.5%. This is the highest rate for both indices since 2012 and 2014 respectively. The Bank of England will be monitoring these figures closely, as an increase in inflation could lead to an increase in interest rates.