(MENAFN) According to the Office for National Statistics in the United Kingdom, the rate of inflation increased in February for the first time in four months, reaching 10.4 percent in the 12-month period. This jump in inflation is largely due to high food and energy prices, which have had a significant impact on consumers already struggling with the cost-of-living crisis in the country. The unexpected increase in inflation has put pressure on the Bank of England to approve its 11th consecutive interest rate increase at its upcoming meeting, despite concerns about the potential economic impact of the ongoing global banking system strains.
While analysts had predicted that inflation would slow to 9.9 percent, the latest figures have surprised many experts. As a result, economists are now expecting the central bank to raise its key bank rate by at least a quarter percentage point. The chief economist at the Institute of Directors, a business lobby group, argues that the Bank of England's job is not yet done, and that the recent data suggests that the bank should not hesitate to raise rates further.
Despite the ongoing economic uncertainty, the Bank of England has been struggling to contain the fallout from Russia's war in Ukraine, which has driven up the cost of food and energy. These pressures have, in turn, fueled broader price increases and demands for higher wages. As a result, the bank is facing a difficult balancing act between controlling inflation and supporting economic growth in the country.
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