Written by Eben Novy-Williams, CNN
Inflation in the U.K. hit a 10-year high in February, as prices for everyday items rose more than the Bank of England had expected.
The British consumer prices index (CPI) increased 1.8% in February compared to the same month in 2017, according to the Office for National Statistics (ONS). Economists had predicted a 1.6% increase in the inflation rate.
The figure is up from January’s 1.7% reading and marks the largest month-on-month increase since April 2015.
“Over the last year, prices have increased at their fastest rate since March 2012,” said ONS chief statistician Rob Kent-Smith. “This was in part because of the fall in sterling as a result of the Brexit vote.”
A fall in the value of the pound following the 2016 Brexit vote pushed up the cost of imports, increasing prices for many consumers.
Nevertheless, the British pound stabilized against the dollar in recent days as financial markets began pricing in a probability of a May election, which some see as a boon for Prime Minister Theresa May, who hopes to strengthen her hand in negotiations with the European Union over the terms of the Brexit process.