British inflation reached a 2½-year high in January as rising fuel prices bumped up the cost of living.
The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measure of inflation hit 1.8 per cent last month, up from 1.6 per cent in December, marking its highest level since June 2014.
However, the move came in shy of the Bank of England’s 2 per cent target and economists’ expectations of 1.9 per cent.
Separate figures for the Producer Price Index (PPI) showed that input prices – the amount paid for materials and fuel by UK manufacturers – saw its highest rate of growth since September 2008, rising 20.5 per cent in January.
Sterling’s slump against the US dollar and the euro since the EU referendum result, coupled with rising oil prices, also caused import prices to leap 20.2 per cent over the period, the ONS said.
Ballooning import prices triggered by the Brexit-hit pound are expected to push up everyday prices as companies pass on their soaring costs to consumers.
ONS head of inflation Mike Prestwood said: “The latest rise in CPI was mainly due to rising petrol and diesel prices, along with a significant slowdown in the fall in food prices.
“The costs of raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound.”
– PA
