UK Inflation higher at 2.8%

The UK inflation rate rose from 2.7% to 2,8% in February, according to figures just released by the Office of National Statistics (ONS), not unexpected as higher energy and fuel prices impact on the consumer budget.

With sterling under pressure in the foreign exchange markets due to poor UK growth figures and imports likely to cost more in the future, including oil, the prospects are for inflation to move even higher over the next year. Some analysts are seeing 3% being breached in the next three months, the Bank of England target being 2%. There are rumours that George Osborne will raise this level in his budget speech on Wednesday at 12.30, as well as outlining further cuts in Government spending, a strategy it is clearly going to stick to no matter how tough it gets.