UK inflation resumed its upward march last month, accelerating more than forecast to the fastest pace in four years.
An increase in prices for computer games, laptops and package holidays — partly reflecting the impact of the weaker pound — lifted the inflation rate to 2.9 percent, the highest since June 2013.
Economists had forecast that it would remain at 2.7 percent.
Core inflation, which excludes food and energy, also unexpectedly quickened last month, according to the UK Office for National Statistics (ONS). It reached 2.6 percent, the highest since November 2012.
The price pickup means additional pressure on households, who are not seeing their wages keep pace.
Bank of England (BOE) Governor Mark Carney expects inflation to keep accelerating this year before falling back slightly starting next year. The BOE targets a 2 percent rate.
Faster inflation is already weighing on the economy. Growth slowed to 0.2 percent in the first quarter, partly because of weaker consumer spending, and the UK National Institute of Economic and Social Research estimates it has not picked up so far this quarter.
Consumers might further retrench after this month’s snap election saw British Prime Minister Theresa May lose her parliamentary majority, adding to uncertainty surrounding Brexit negotiations.
That prompted investors to pare bets on a BOE interest-rate increase by the end of next year to 36 percent from 52 percent before the vote.
The pound stayed higher against the dollar after the inflation. It has fallen 2 percent since the election on Thursday last week.
While inflation has climbed from just 0.3 percent a year ago, there are signs that some of the import-cost pressures are easing after the pound stabilized earlier this year.
The annual increase in factory input prices slowed to 11.6 percent last month, the weakest since September last year, and the ONS said it’s “continuing its decline from 19.9 percent in January 2017 following the recent strength of sterling.”
Output-price inflation held steady at 3.6 percent.
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