Rising prices for food and alcohol pushed inflation higher in February, the latest official figures show. The Consumer Price Index (CPI) rose to 1.9% last month, the Office for National Statistics (ONS) said.
The index is a measure of inflation calculated by tracking the price of a selected basket of goods and services. It is worth noting, though, that while February’s rise in inflation may be marginally disappointing for consumer purchasing power, it is still looking appreciably better than in mid-2018 – especially as earnings growth retained its firmer tone in January.
Real earnings growth is currently 1.5%, the best level since end-2016, although still appreciably below long-term norms. Most commentators believe that inflation will spike significantly higher if the UK leaves the EU without a deal, primarily due to a likely marked fall in sterling – even though the government has indicated that under a temporary scheme, 87% of imports by value would be eligible for zero-tariff access compared to 80% of imports currently being tariff-free.