UK Inflation at highest rate since 1992

The Bank of England is under pressure to raise interest rates yet again after UK inflation accelerated to its highest rate in thirty years. Consumer prices rose at an annual rate of 5.5 per cent last month, up from 5.4 per cent in December and well above the 0.7 per cent in January 2021, data published by the Office for National Statistics showed on Wednesday. This data highlights that UK inflation was more than double the 2% target set by the central bank. Looking forward, inflation is expected to peak at about 7% in April when Ofgem, the energy regulator, will increase its default energy price charge cap. Analysts have argued however that even with the fiscal support announced by the government earlier this month, higher inflation is coming and the income squeeze will become more prevalent. All of this fuels more expectation that the Bank of England will raise interest rates again this year.