UK inflation has climbed to a new 30-year high as spiralling energy costs, energy bills and food prices drive prices higher. Consumer prices rose by 6.2 per cent in the year to February, up from 5.5 per cent in January, the Office for National Statistics reported on Wednesday.

This was the highest inflation rate in the data series which began in January 1997 and the highest rate in the historic modelled series since March 1992, when it stood at 7.1 per cent.

On a monthly basis, the Consumer Price Index rose by 0.8 per cent in February, the largest monthly increase between January and February since 2009. Last week, the Bank of England predicted that inflation would reach eight per cent in April and could hit 10 per cent in the autumn, when the energy price cap rises again.

Separately, business activity across Germany’s private sector eased in March due to the combination of rising prices, material shortages, geopolitical uncertainty and COVID-related absences, survey data from S&P Global showed on Thursday.

However, the declines were smaller than expected as easing supply bottlenecks and fewer COVID restrictions allowed the German economy to start recovering before Russia’s invasion of Ukraine.

S&P Global’s flash services Purchasing Managers’ Index (PMI) dropped to 55.0 in March from 55.8 in February, which was the highest reading since August. Analysts had predicted a bigger decline to 53.8. Likewise, the manufacturing PMI fell to 57.6 in March from 58.4 a month earlier.

The expected reading was 55.8. As a result, the composite PMI, which tracks the manufacturing and services sectors that together account for more than two-thirds of the German economy, slipped to 54.6 in March from February’s six-month high of 55.6.

Finally, sales of previously owned homes in the US plunged in February in the wake of rising mortgage-interest rates and a shortage of homes. Existing home sales plummeted 7.2 per cent in February from the prior month to a seasonally adjusted annual rate of 6.02 million, according to a report by the National Association of Realtors. Compared to the same month last year, February sales fell by 2.4 per cent.

“Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases,” NAR chief economist Lawrence Yun said.

 This article has been prepared by Bank of Valletta plc for general information purposes only.