UK inflation unexpectedly jumped up in February to close to its highest level in 40 years, driven by rises in the cost of drinks, women’s clothes and fresh food as salad items ran short.
The Office for National Statistics (ONS) said annual inflation as measured by the consumer prices index stood at 10.4%, confounding City forecasts for a modest fall to 9.9%.
The latest figures are likely to add to pressure on the Bank of England to raise interest rates on Thursday, despite growing fears over the unfolding crisis of confidence in the global banking system after the failure of Silicon Valley Bank in the US earlier this month and the weekend rescue of the Swiss lender Credit Suisse.
Inflation had fallen for three consecutive months prior to February, cooling from a peak of 11.1% in October to reach 10.1% in January before last month’s unexpected reverse.
The ONS blamed a sharp increase in the cost of fresh food and non-alcoholic drinks, the rising price of restaurant meals and a surge in the price tag on women’s clothes for reversal in a recent decline in inflation.
The salad crisis, which resulted in empty shelves once occupied by tomatoes, peppers and cucumbers, was highlighted by the ONS as the driving force behind the rise in fresh food costs.
It said: “The largest upward effect came from vegetables, where prices rose in the month to February 2023 by more than a year earlier. There have been media reports of shortages of salad produce and other vegetables, reportedly because of bad weather in southern Europe and Africa, and the impact of higher electricity prices on produce grown out of season in greenhouses in the UK and northern Europe.”
These price movements resulted pushed the cost of vegetables up by 18% in the year to February 2023, the highest rate since February 2009.
The ONS chief economist, Grant Fitzner, said: “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.”
Energy prices also played a part, though to a lesser extent than a year ago, pushing down the cost of transport.