The cost of living unexpectedly rose last month after a vegetable shortage helped push food prices to their highest rate in more than 45 years.
The Office for National Statistics (ONS) revealed Consumer Prices Index (CPI) inflation rose to 10.4 per cent in February from 10.1% in January.
Most economists were expecting CPI to fall to 9.9% in February.
However, food and non-alcoholic prices rose by 18% year-on-year last month, up from 16.7% in January and the highest since August 1977.
Alcohol prices in restaurants and pubs also drove up costs for households, but fuel prices continued to fall.
READ MORE: Shop price inflation hits new heights
The figures come ahead of a decision on interest rates on Thursday.
Annual inflation rates rise again following the easing in Jan 2023:
— Office for National Statistics (ONS) (@ONS) March 22, 2023
▪️ Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.2% in the 12 months to Feb 2023, up from 8.8% in Jan 2022
▪️ CPI rose by 10.4%, up from 10.1%
➡ https://t.co/VVfmybQmsG pic.twitter.com/l1dXAi7yyk
Some experts have been predicting the UK’s central bank would hold off from raising rates further due to the markets volatility, but the latest inflation data will likely complicate the decision.
ONS chief economist Grant Fitzner said: “Inflation ticked up in February mainly driven by rising alcohol prices in pubs and restaurants following discounting in January.
“Food and non-alcoholic drink prices rose to their highest rate in over 45 years with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing.
“These were partially offset by falls in the cost of motor fuel, where the annual inflation rate has eased for seven consecutive months.”
Numerous products, notably tomatoes, cucumbers, and peppers, were in short supply in February after poor weather conditions disrupted the supply chain in Spain and North Africa.
Prices of bread and cereals as well as chocolate and hot beverages also soared to the highest annual rate since at least 2008, the ONS states.
The UK fiscal watchdog, the Office for Budget Responsibility (OBR) last week cut its forecasts for inflation, predicting CPI would end the year at around 2.9%.
Motor fuel prices are falling – with the annual rate dropping to 4.6% in February from 7.7% in January.
The ONS said average petrol and diesel prices stood at 148.0p and 169.5p a litre respectively, in February 2023, compared with 147.6p and 151.7p a litre a year ago.
Last year’s painful energy bill hikes will also begin to drop out of the inflation calculation.
Alpesh Paleja, the CBI’s lead economist, said that “while inflation rose in February, the outlook for the months ahead is looking more benign”.
“But while we expect inflation to fall back over this year, the firmness in domestic price pressures is something that the Bank of England will be keeping a close eye on.
“And despite further falls over the coming months, this year will still be a high-inflation environment for both households and businesses.”
The latest data also showed rises in the CPI measure of inflation including housing costs (CPIH), up to 9.2% in February from 8.8% in January, while the Retail Prices Index (RPI) leaped to 13.8% from 13.4% in January.
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