Inflation rises past BoE’s two per cent target

The UK’s inflation rate jumped from 1.8 per cent in January to 2.3 per cent in February, the Office for National Statistics (ONS) has revealed.

This is above the Bank of England’s (BoE) provisional target of two per cent.

The rate is calculated using the prices of common consumer goods, such as food, household goods, and energy products. The more these products rise in value, the greater rise in overall inflation.

The ONS said that food prices had recorded their first annual increase for more than two-and-a-half-years, rising 0.3 per cent year-on-year.

Unsurprisingly, the vote to leave the European Union is still impacting on the value of the pound, making imports more expensive.

This is the case in the price of oil. Oil is almost exclusively priced in dollars, so a 13 per cent drop in the pound against the dollar results in a respective increase.

The ONS said that transport costs accounted for more than a third of the inflation figure.

Jonathan Athow, ONS deputy national statistician, said: “Inflation has risen to its highest rate for almost three and a half years with price increases seen across a range of items but with food and fuel having the largest impact.”