Inflation unexpectedly jumps to 10.4% after February salad shortage

It’s the first rise after three consecutive months of decline.

UK inflation, which is used to measure how prices increase, rose at a rate of 10.4% in the year to February, according to the Office for National Statistics (ONS). In comparison, inflation rose by 10.1% in the 12 months leading to January.

This means the cost of living has unexpectedly risen, with a rise in food and restaurant prices the main drivers behind this increase.

Grant Fitzner, Chief Economist at the ONS, said that food and non-alcoholic drink prices rose to their highest rate in over 45 years. In the year to February food inflation rose by 18.2%.

He noted that part of this rise was due to the countrywide shortage of vegetable and salad items last month. This was caused by bad weather and high energy costs, which forced these items to increase in price.  

As for restaurants, the rise in inflation here was mainly driven by alcohol prices.

“Inflation ticked up in February mainly driven by rising alcohol prices in pubs and restaurants following discounting in January,” said Fitzner.

However, there were some items which continued to decrease in price.

The cost of fuel has now fallen for seven consecutive months, easing from an annual rise of 7.7% in January to an annual rise of 4.6% in February.

Inflation continues to diminish the true spending power of savers’ cash, but this should not deter consumers from shopping around for a better deal. Providers are making notable improvements to ISAs as we edge closer to the new tax year, so it’s vital savers take note of the latest offers to hit the market and move quickly to take advantage.

Those savers who are coming off a one-year fixed bond or ISA will notice rates are much higher today for an equivalent deal.

Both the top one-year fixed bond and one-year fixed ISA paid less than 2% a year ago, however, today the top deals pay 4% or more. This will be great news for savers who prefer to make a lump sum and even take interest as a form of monthly income.

Challenger banks continue to dominate the highest positions within the top rate tables, but they can move quickly to pull a deal in high demand, as they typically focus on securing balances to fund their future lending.

Savers who prefer to keep their cash in a flexible account must still take time to check their interest rate regularly, especially to establish if their provider has not passed on base rate rises.

Time is ticking for consumers to use their ISA allowance, however, savers will notice a rate difference between fixed bonds and ISAs remains, so they must be aware of both their Personal Savings Allowance (PSA) and ISA allowance.

To make the search for a competitive return easier, it would be wise for savers to sign up to rate alerts and newsletters to keep them up to date.