Analysts had expected that inflation would rise to 2.1 percent this month, with grocery bills in particular increasing. The larger than expected rise has caused the TUC to express concern that working people are being faced with the double blow of both slower wage growth and rising prices. If the government does not make some changes soon, then we could be seeing the start of a new living standards crisis.
The TUC is calling for investment in infrastructure and skills, and a change to the pay restrictions that are hitting nurses, teachers and people in public service. The jump from 1.8 percent inflation back in January to 2.3 percent in February has caused investors to expect the Bank of England to boost interest rates more quickly than previously expected, to help keep price rises in check.
The pound has strengthened against the dollar, putting pressure on FTSE 100 companies that had previously benefited from the weakness of the pound. The direction of the index is not yet clear, however, as concerns about Trumpís economic policies are also weighing on the index, but uncertainty in the UK and Europe is adding volatility to the market.