Inflation unexpectedly jumps to 10.4% amid rising food prices

The UK inflation rate unexpectedly increased to 10.4% in February driven by increased drink and food prices which reached their highest rate in 45 years, according to the latest figures from the Office for National Statistics (ONS). The rise in the CPI annual rate between January and February 2023 came as a result of prices rising by 1.1% on the month, compared with a rise of 0.8% a year earlier. The ONS said the inflation rate in February 2023 mainly reflected price rises in the restaurants and hotels, food and non-alcoholic beverages, and clothing and footwear divisions. These were partially offset by downward effects coming from recreation and culture, and from motor fuels within the transport division. Between January and February 2023, prices at restaurants and cafes increased by 11.4% in the year to February 2023, up from 9.4% in the year to January 2023. Meanwhile, the annual inflation rate for restaurants and hotels was 12.1% in February 2023, up from 10.8% in January, and the highest rate since the constructed historical estimate of 12.1% in July 1991. In addition, food and non-alcoholic beverage prices rose by 18.2% in the year to February 2023, up from 16.8% in January, with the largest increase coming from the price of vegetables. Prices of clothing and footwear also rose 8.0% in the year to February 2023, up from 6.2% in the year to January 2023, but below the recent high of 8.5% in October 2022. Commenting on the figures, 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.”