In Great Britain, the inflation rate surprisingly rose again in February to 10.4 percent. Analysts had expected a decline to less than ten percent.
Core inflation excluding energy and food also jumped to 6.2 percent from 5.8 percent.
This puts increasing pressure on the Bank of England, which will decide on interest rates this Thursday.
Bad surprise with inflation in Great Britain. The country is already suffering from one of the strongest and most persistent inflationary waves of all industrialized countries. The inflation rate in February unexpectedly rose again from 10.1 to 10.4 percent. That shared that Statistics office ONS on Wednesday with On average, analysts had expected a decline to 9.9 percent.
This puts increasing pressure on the Bank of England to raise interest rates further. The British central bank will decide on the key interest rates in Great Britain again this Thursday. On the financial markets, the British pound rose after the inflation data. This reflects the expectation of rising interest rates.
Inflation in the United Kingdom rose to its highest level in four decades at 11.1 percent last October. Since then, inflation has fallen steadily, but only slightly. The British statisticians attribute the fact that it is now increasing again primarily to rising prices for restaurant visits, food and clothing. On the other hand, slight relief comes from the areas of leisure and culture as well as from fuel prices.
The core rate of inflation for all prices except energy and food also shows that inflation is continuing to spread. It rose again in February from 5.8 to 6.2 percent. Here, too, analysts had expected the core rate to fall to 5.7 percent.
The Bank of England before a split
The Bank of England was the first central bank to initiate the interest rate turnaround in autumn 2021. Since then, it has increased its key interest rate ten times – most recently in February to 4.0 percent. In Great Britain, too, there had recently been speculation that the Bank of England could raise interest rates further
The European Central Bank raised the key interest rate for the euro zone by 0.50 percentage points last week. The US Federal Reserve will decide on key interest rates in the USA this Wednesday. When making interest rate decisions, the central banks must find the right balance between fighting inflation and taking into account the growing risks in the banking sector and the shaky economy.
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