London Daily

Focus on the big picture.
Monday, Sep 01, 2025

Inflation takes surprise leap to 10.4% with food and booze costs to blame

Inflation takes surprise leap to 10.4% with food and booze costs to blame

Rising salad and vegetable costs linked to the shortages of last month contributed to the upwards pressure on inflation, alongside higher pub and restaurant alcohol prices, the Office for National Statistics reports.

The rate of inflation has taken a surprise leap, driven by a rising cost of alcoholic drinks in pubs and food - partly a consequence of the recent salad shortage.

The Office for National Statistics (ONS) calculated the consumer prices index (CPI) measure of inflation at 10.4% over the 12 months to February.

That was up from an annual rate of 10.1% the previous month, dashing expectations of an easing that has been seen since the 41-year high of 11.1% in October last year, as the cost of living crisis gathered steam.

At that time, unprecedented energy prices were being swallowed by businesses and households alike amid the war in Ukraine despite financial support from the government.

Since then, wholesale energy costs have gradually eased.

However, it takes time for those to filter down through the economy to goods and services.

Some supply chains are also complicated by related factors such as wider commodity cost shifts and shortages, such as the lack of tomatoes and other veg items that struck in February but has since eased.

ONS chief economist Grant Fitzner said: "Inflation ticked up in February mainly driven by rising alcohol prices in pubs and restaurants following discounting in January.

"Food and non-alcoholic drink prices rose to their highest rate in over 45 years with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing.

"These were partially offset by falls in the cost of motor fuel, where the annual inflation rate has eased for seven consecutive months."

The latest figures come after Chancellor Jeremy Hunt said in last week's budget that the Office for Budget Responsibility had forecast inflation would fall to 2.9% by the end of 2023.



Interest rate hike ahead?

The inflation data will also be closely watched by the Bank of England ahead of its next interest rate decision on Thursday, which had been thought to be finely balanced in advance of the figures.

But financial markets now firmly believe that policymakers will raise Bank rate again though slow the pace of increase - helping the pound make some gains.

A Reuters poll of economists also expects a 0.25 percentage point hike to 4.25% following February's rise of 0.5 percentage points.

Like the European Central Bank last week, the Bank's monetary policy committee is expected to send a clear signal that it is focused fully on inflation and not worried by the effect its rate rises have had on bank balance sheets amid the recent turmoil for shares in the sector.

There had been a popular school of thought, ahead of Wednesday's data, that the Bank would pause for breath after consistently raising rates since December 2021.

That was because core CPI inflation figures, which strip out volatile elements such as energy, had undershot the Bank's most recent forecasts.

Private sector wage growth had done the same.

The latest inflation figures showed core inflation rising to 6.2% from 5.8% in January.

Mr Hunt said of the inflation spike: "Falling inflation isn't inevitable, so we need to stick to our plan to halve it this year.

"We recognise just how tough things are for families across the country, so as we work towards getting inflation under control we will help families with cost of living support worth £3,300 on average per household this year."

Newsletter

Related Articles

0:00
0:00
Close
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Argentine President Javier Milei Evacuated After Stones Thrown During Campaign Event
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Starmer Should Back Away from ECHR, Says Jack Straw
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
Chinese AI Chipmaker Cambricon Posts Record Profit as Beijing Pushes Pivot from Nvidia
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Welcome to The Definition of Insanity: Germany Edition
Just a reminder, this is Michael Jackson's daughter, Paris.
Spotify’s Strange Move: The Feature Nobody Asked For – Returns
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
×