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Energy costs force inflation to 2.8%
by Sarah Miloudi on Mar 19, 2013 at 10:18
The UK's rate of inflation ticked up slightly during February, rising from a steady 2.7% to 2.8%.
Economists believe the consumer price index (CPI) is likely to rise further, with the cost of energy pushing up inflation as utility price hikes kicked in.
'Of some comfort was the core rate was unchanged at 2.3%,' said Vicky Redwood, of Capital Economics.
Nonetheless, the consultancy's chief UK economist said inflation looks set to climb to a peak of about 3.5% over the summer months, before struggling to pull back later in the year.
Others said the Bank of England is likely to hold fire in its votes on additional easing, and believe the months ahead will be characterised by a higher cost of living, driven by increasing food and petrol prices.
CPI's eventual fall will come, though it will be slowed by the higher import costs triggered a result of the recent fall in the pound, helping to keep elevated the public's expectations for inflation.
Chris Williamson, of Markit Economics, said: ' Inflationary pressures picked up in February, not just at the retail level but also in the supply chain.
'Alongside some signs of underlying improvement in the economy and concerns about the weakness of the pound, the upturn in price pressures is likely to cause the Bank of England to hold back on voting for further stimulus at its next meeting.'
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