LONDON, Feb. 19 (Xinhua) — Britain’s Consumer Prices Index (CPI) rose 3 percent year-on-year in January, up from 2.5 percent in December 2024, surpassing market expectations, according to official data.
The latest data marks the highest inflation rate in 10 months, with most economists predicting a 2.8 percent rise.
Transport, food and non-alcoholic beverages were the largest contributors to the yearly CPI rise, while housing and household services had the most significant downward impact on the index, the Office for National Statistics (ONS) reported.
“The rise was driven by airfares not falling as much as we usually see at this time of year, partly impacted by the timing of flights over Christmas and New Year,” said Grant Fitzner, chief economist at the ONS.
“Private school fees were another factor, as new value-added tax (VAT) rules meant prices rose nearly 13 percent this month,” Fitzner said.
The inflation surge comes after the Bank of England (BoE), Britain’s central bank, cut interest rates from 4.75 percent to 4.5 percent in early February.
During a visit to Brussels on Tuesday, BoE Governor Andrew Bailey indicated that the central bank remains prepared to lower interest rates again this year despite a surge in pay growth and an anticipated rise in inflation.
“Pay growth went up, but actually, not quite as much as we were expecting,” Bailey said.
“Higher inflation would not represent a story about the fundamental state of the economy because it largely reflected changes in regulated prices, like energy bills,” Bailey said.
