UK inflation jumped to 3 % in January, an increase of 2.5 % in December, driven by increasing food costs, high air prices and increasing private school fees.
According to the National Statistics Office (ONS), this is the fastest rate of price growth in 10 months.
Food for groceries such as meat, eggs, grains and butter became significantly more expensive, as elements such as olive oil and pregnancy increased by 17 % and 16 %, respectively during the past year. Meanwhile, many families are preparing for more increases, as both energy, water and council bills are scheduled to rise in April.
The high wages bills and the upcoming increase in national insurance can also pay some employers to transfer costs to consumers, which increases the pressure of inflation. “Life is a conflict,” a young mother, Gabi Kaouli, told the BBC, noting that her weekly store has doubled over the past three years.
One of the main factors in the inflation jump in January was to include VAT on private school fees for the first time, as of January 1. ONS says this addition is “once” led to a 13 % increase in fees at the beginning of the year.
Air prices also contributed to the height. Although airline prices usually decreased in January, the decline was less severe than usual, which means that travel costs remained higher in previous years.
The higher inflation rate is expected to have new speculation about whether the Bank of England will slow down interest rate discounts. As inflation continues above the bank's 2 % goal, some economists believe that policy makers may reconsider the additional discounts, although many expect the gradual declining trend to remain on the right track.
Professor Jonathan Haskel, a former member of the bank's monetary policy committee, says it is unclear whether the last height is a “more harbinger in the future” or an external simplicity that can be deducted when setting a monetary policy.
While Treasury Secretary James Murray has warned that the road to low inflation may be “rugged”, he insists that government reforms “will launch” growth. The government also refers to the lock of government triple pensions and the new lower rates of wages as ways to alleviate the living cost crisis.
However, the liberal conservatives and democrats blamed the Labor and spending taxes for a rise in January in inflation, with the liberal democratic leader Ad Davi of a “new era of stagnation” if growth remains weak while climbing prices.
Analysts, including Ruth Gregory in Capital Econic, describe the inflation leap as “uncomfortable” for England Bank, but they do not expect to stop more interest rates completely. However, the constant threat of high wages and bills for consumers indicates that inflation can remain an urgent problem in the foreseeable future.