Inflation in the UK rose to its highest level in nearly a year in January, driven by the increase in private school fees.
The consumer prices index rose from 2.5% in December to 3% last month, according to the Office for National Statistics (ONS).
The increase - which was larger than economists predicted - comes after the government ended VAT exemption for private schools at the start of the year.
In January, many schools passed price increases onto parents after the standard rate of 20% was applied to private school education and boarding fees.
The ONS said private school fees was the only factor driving up education inflation, which surged by 12.7% compared to the previous month. The rise was also driven partly by air fares, meat and bread.
Reacting to the latest inflation published this
morning, Stuart Morrison, research manager at the British Chambers of Commerce
said: “Today’s data underlines the inflationary pressures in the economy
right now and the real challenges businesses are facing.
“Firms are having to deal with significant cost burdens which
threaten to fuel inflation further. Within weeks they’ll be facing the hikes in
national insurance contributions and the minimum wage.
“Overall, 75% of businesses
cited labour costs as a main driver of price hikes and yesterday’s wage data is
another reminder of that."
FTSE 100
The UK's flagship share index, the FTSE 100, was down 19-points 8,762 shortly after opening this morning.
Brent crude oil futures were up 0.57%, trading at $76.27 a barrel.
Companies reporting today
19-Feb | |
|---|
BAE Systems* | Full Year Results |
Glencore* | Full Year Results |
HSBC* | Full Year Results |
Rio Tinto* | Full Year Results |