UK inflation rises to 6.2%, the fastest rise in 30 years, and fears are worse

The cost of living continued to rise in February, showing the challenge the Chancellor faces ahead of her spring spending statement on Wednesday afternoon

UK inflation has risen 6.2 percent as Rishi Sunak prepares to deliver his spring declaration On Wednesday.

The Chancellor is under pressure to deal with the rising cost of living for families across the UK.

Prices rose 6.2% in the 12 months to February – the fastest in 30 years – as fuel, energy and food costs continued to hit the highest rates in a generation.

Chancellor Rishi Sunak faces growing calls to offer more support as household budgets are squeezed.

There is speculation that Mr. Sunak could cut the boost powers and raise the threshold for higher social security tax when he announces his spending plans at noon today.

Measures he could introduce also include extending the £200 energy support scheme and reducing the fuel tax – taking around £3.50 off the cost of a 90lb fuel tank.

Prices are rising faster than wages and the Bank of England believes it could hit double digits this year.

Inflation is the Rate at which prices are increasing. If a bottle of milk costs £1 and that goes up by 5p then milk inflation is 5%.

Since December last year, prices have risen at their fastest rate since the 1990s. Inflation is likely to accelerate in April when the energy price cap is lifted.

This will add £693 a year to average household fuel bills in England, Scotland and Wales, while a proposed increase in Social Security will also put pressure on household budgets.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said prices of a wide range of goods and services, from food to toys and games, have risen.

“Clothing and footwear saw a return to traditional February price hikes after last year’s slumps when many stores were closed.

“Furniture and flooring also contributed to the rise in inflation as prices started to recover after the New Year sales,” he added.

Rachel Winter, Associate Investment Director at Killik & Co, said: “Inflation continues to choke economic growth as we plunge deeper into a cost-of-living crisis and grapple with a triple whammy of higher gas prices, household bills and food prices.

“”In order to tame the rising prices and stabilize the market, the The Bank of England raised interest rates last week for the third time in a row.

“This comes as economists are predicting that the UK could see double-digit inflation for the first time in 40 years, threatening the economy’s financial stability if inflationary pressures are not reduced.

“It could take months for the impact of a rate hike to trickle down into the real economy, so all eyes will be on Rishi Sunak as he makes the springtime statement for some more immediate fixes.

“As a result, it is more important than ever for long-term savers to consider inflation-proofing. Cash savings are currently being eaten up by inflation. As we near the end of the year, consumers should look to use products like a stock ISA to give them a better chance of earning returns above inflation.”