How fast are prices rising in the UK?

UK inflation was to 3.4% in the year to February - but remains above the Bank of England;s 2% target. It could affect the next interest rate for borrowers and savers. Inflation is the increase in the price of something over time.

The prices of hundreds of everyday items, including food and fuel, are tracked by the Office for National Statistics. Inflation soared to 11.1% in October 2022, the highest rate for 40 years. Lower inflation doesn;t mean prices are falling - just that they are rising less quickly.

One reason is that worker shortages have made it more expensive to find and keep staff.While inflation remained several times that level, the Bank increased interest rates to 5.25%. The theory is that by making borrowing more expensive, people will have less money to spend.

This reduces demand for goods and slows price rises. But it;s a balancing act - increasing borrowing costs risks harming the economy. Pay, excluding bonuses, grew by 6.2% in the last three months of 2023.

After taking inflation into account, it means pay went up by 1.9%. Several industries, including rail, healthcare and education, have gone on strike over pay. The government has argued that big pay rises could push inflation higher.

The annual inflation rate for countries using the euro was 2.6% in February.The European Central Bank raised its key interest rate to a record high 4% in September.In the US, inflation hit 3.2%, up very slightly from 3.1% in January.