CPI inflation hits 30-year high

Inflation in the UK has hit a 30-year high as the Consumer Prices Index (CPI) rose by 6.2% in the 12 months to February, the Office for National Statistics (ONS) has confirmed.

The figure is the the highest CPI 12-month inflation rate in the ONS’ series which began in January 1997, and the highest rate in the historic modelled series since March 1992, when it stood at 7.1%.

In February, CPI inflation rose by 0.8% from the previous month, compared with a rise of 0.1% in the same month in 2021.

The figures come as Chancellor Rishi Sunak faces pressure on the day of his spring statement to provide more financial support to consumers across the UK amid the cost of living crisis.

The ONS also published its Consumer Prices Index including owner occupiers’ housing costs (CPIH), which increased by 5.5% in the 12 months to February.

This figure is up from 4.9% to January and is the highest recorded 12-month inflation rate in the ONS’ series which began in January 2006. It is also the highest rate since CPIH stood at 6.2% in March 1992 in the historic modelled estimates, also a 30-year high.

Commenting on the figures, Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “Inflation has hit a 30-year high, and worse is yet to come. The perfect storm of massive fuel and energy price rises, accompanied by food price hikes, supply chain problems and booming demand from those with lockdown savings to spend, pushed prices into the stratosphere.

“And this was even before the conflict in Ukraine began. By the time we get to April, and the massive energy price hike, millions of people will be feeling the pain of rising prices.”

“For those on higher incomes, with some wriggle room, and luxuries left to cut, there may well be things they can do without. If you haven’t yet drawn up a budget to see where the savings are lurking, now is the time.

“However, those whose finances are already on a knife edge face the misery of choosing between cutting essentials or racking up debts that could make things even worse in the long run.”

Wesleyan director of investments, Martin Lawrence, added: “Every percentage point that inflation climbs means more and more pressure on people’s pockets – and some individuals’ finances will have already passed breaking point.
 
“The current rate of inflation is one that an entire generation has never experienced before. All eyes will be on the Chancellor today to see what he’s going to do to help ease this cost of living crisis. Anything short of immediate relief will fall short with the thousands already struggling, or simply unable, to make ends meet.
 
“In this environment, there will understandably be many who simply cannot afford to save. But for those that can save or have savings, it is now more important than ever to think about what they can do to help protect their money from inflation’s effects.”

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