The UK's annual inflation rate rose to 6.2% in February, the highest since March 1992, as soaring food, fuel and energy costs continue to deepen the country's cost of living crisis.
February's Consumer Price Index print was above consensus expectations among economists who were polled by Refinitiv for a 5.9% annual figure.
Between January and February, the inflation rate was the largest since 2009, with a 0.8% monthly increase.
The Bank of England has hiked interest rates three times in a row, raising the cost of borrowing from its historic low of 0.1% to 0.75%, as it looks to contain runaway inflation without hurting economic growth.
The Monetary Policy Committee delivered a more dovish tone than expected last week, highlighting the squeeze on household incomes due to a sharp rise in commodity prices. Policymakers think inflation will peak at 8% in the second quarter of 2022.
British Finance Minister Rishi Sunak is under pressure to address the cost of living crisis when he delivers his Spring Statement later on Wednesday.
A planned 10% increase to National Insurance (a tax on earnings) kicks in for many workers in April, while at the same time the U.K.'s energy price cap soars, compounding the squeeze on household income as consumer.
This morning's inflation data shows just how dire the situation is, and there is a need for the government to act to help save many from slipping into financial difficulty as their wages are quickly swallowed up.
Markets and developed economies are battling soaring inflation and uncertainty surrounding Russia's war on Ukraine. The market environment is delicate and investors need to watch the data and allocate accordingly.
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