UK inflation rises as womenswear prices jump
UK inflation has risen again, a sign that we’re not out of the woods yet and consumer activity is still being hurt by rising prices. The Office for National Statistics (ONS) said Wednesday that the UK Consumer Prices Index hit 10.4% in February vs 10.1% in January, confounding expectations for it to dip below 10%. And CPI including owner occupiers' housing costs (CPIH) rose by 9.2%, up from 8.8% in January.
A lot of the rise was to do with higher housing, energy and food and drink prices that jumped at their fastest rate since 1977. But fashion was also in the frame.
The ONS said CPIH clothing and footwear prices rose 8% in February year on year (compared to a hike of 6.2% in January). They were also 2.5% higher than January’s figures. That could have been linked to the end of clearance sales and the arrival new, higher-priced seasonal stock.
The report said that “prices usually rise between January and February as new stock starts to enter the shops following the New Year sales period. However, the 2.5% rise in 2023 is the largest observed between January and February since 2012. The price movements reflect the amount of discounting observed in the datasets”.
And it added that the biggest culprit was women's clothing speficically, where prices rose by more this year than a year ago.
The UK’s Office for Budget Responsibility had forecast last week that inflation would drop below 3% by the end of this year and if that’s to happen, there need to be some sharp downward movements in the months ahead.
What happens to interest rates will be important too but there’s a belief that there are more interest rate rises to come.
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