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Surprise inflation rise gives BoE major interest rate headache, ICAEW says

Author: ICAEW

Published: 22 Mar 2023

Suren Thiru, Economics Director at ICAEW, responds to the UK inflation figures for February 2023, released by the Office for National Statistics today (Wednesday 22 March 2023).

“This surprising rise in inflation highlights the continued crisis facing households and the damaging squeeze on firms' ability to invest and operate at full capacity.

“Inflation should resume its downward trajectory in March, when the strong base effect from the comparison to March 2022 – when Russia’s invasion of Ukraine sent fuel prices skyrocketing – is expected to lower the headline rate.

“While inflation remains a key risk, we would caution the Monetary Policy Committee against raising interest rates this week given the fragility in financial markets.

“Pushing ahead with raising rates in the current climate would risk further market turbulence and weaken our economic prospects.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841