Inflation up slightly on the back of rising fuel costs
The Office for National Statistics (ONS) has released the set of inflation figures for February, the main one being a slight rise of 0.1% compared to the previous month. The rate of Consumer Price Inflation (CPI) for February stood at 2.8%, while the Retail Price Index (RPI) dropped by 0.1% to 3.2%.
According to the Bank of England, the main reason why inflation rose is because of the above-inflation rise in the cost of energy, something that millions of businesses and households throughout the UK are being forced to contend with. Video games and cameras were also partly behind the marginal rise in inflation last month.
Chancellor George Osborne is preparing for the annual Budget later this week, but it’s not certain whether he will address the burning issue of inflation or its causes. As well as a comparatively weak Pound, rising energy costs are rapidly becoming a problem for many hard-pressed businesses who will be listening intently to his big speech.
In the meantime, businesses as well as households throughout the country who are being lumbered with astronomical price rises from their energy suppliers are being left with few options to lower their costs. Switching supplier or just taking price rises are the only two avenues that many companies can go down.
Many people hope that Mr Osborne will address the pressing issue of energy bills, but could government intervention work and what should it involve if they are to try and make a change
The latest rise in the inflation rate means that the Bank of England’s initial target of 2% is now further away than it has been for some time. It’s likely that businesses and the Treasury will keep a firm eye on next month’s figures to see if there will be any change.