Newspaper article The Evening Standard (London, England)

Inf Lation Is Back. Gas Prices Up 33% Meat and Veg Soar Figures Stun City

Newspaper article The Evening Standard (London, England)

Inf Lation Is Back. Gas Prices Up 33% Meat and Veg Soar Figures Stun City

Article excerpt

Byline: JONATHAN PRYNN Consumer Business Editor

SOARING prices and a weak pound have brought the shock return of inflation, it was announced today.

The Government's official measure, the Consumer Prices Index, jumped from three per cent to 3.2 per cent last month.

It stunned City economists, who had been predicting a fall to 2.6 per cent.

The increase was also attributed to rising supermarket prices and many shops' decision to reverse the 2.5 per cent cut in VAT brought in by the Government in an attempt to stimulate the economy. Gas prices went up year on year by 33 per cent.

Another major contribution to the rise in the CPI came from fresh vegeta- bles, which have gone up 23.8 per cent in a year and almost five per cent in a month. The Office for National Statistics said carrots, cucumbers and courgettes were among those rising fastest in price. Other foods that have gone up dramatically include pizza and mayonnaise.

Richard Lim, a spokesman for the British Retail Consortium, said: "The weak pound has increased the cost of imported food, such as certain fruits and vegetables, which aren't harvested here at this time of year.

"The weak exchange rate has also made UK produce more attractive for overseas buyers, restricting supplies of beef and lamb at home and pushing prices up. Non-food goods such as clothing, footwear and some electricals are cheaper than they were this time last year." Alan Clarke, UK economist at BNP Paribas, said the inflation figure was "much higher than expected, with the

Soaring prices at the checkout wipe out VAT decrease exchange rate probably to blame for now." Transport prices also rose, reflecting an increase in the price of petrol of 3.2 pence per litre between January and February, the ONS said.

Around 70 per cent of fresh fruit at this time of year comes from overseas .

ONS statistician Rob Pike added that the cut in VAT from 17.5 per cent to 15 per cent which was introduced in December, was being reversed on the high street. …

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