UK inflation jumps to 2.3% in February, pushing the pound higher - as it happened
Food and fuel prices drove the consumer prices index to the highest level in almost three-and-a-half years in February
- Pounds rises 0.9% to $1.2465 after inflation data
- TUC warns of fresh living standards crisis
- Mark Carney: BoE will learn from Charlotte Hogg debacle
- Chancellor on track to meet his borrowing targets
3.02pm GMT
The earlier gains on Wall Street have been erased, and the FTSE 100's losses have accelerated:
2.43pm GMT
Monday's Eurogroup meeting of finance ministers ended without a decisive agreement between Greece and its creditors. The Guardian's Helena Smith brings this report:
2.32pm GMT
The pound is still up 0.8% against the dollar at $1.2458.
Meanwhile the euro is also having a good day, climbing to six-week highs of above $1.08 following the French presidential election debate, where the centrist Emmanuel Macron appeared to come out on top over the far-right's Marine Le Pen.
2.21pm GMT
Over in the US, markets have opened higher, tracking rises in Europe (with the exception of the FTSE) and higher oil prices.
Related: Apple updates iPad line and launches red iPhone 7
1.58pm GMT
Pay packets in the UK are probably already shrinking according to the Resolution Foundation.
Stephen Clarke, economic analyst at the thinktank, says:
After 38 months inflation is back above the Bank's target, bringing to an end the era of ultra-low inflation that has boosted living standards in recent years. Today's rapid increase is part of a wider trend with price rises set to the big living standards story of this year.
To date pay settlements have failed to respond to rapidly rising prices, meaning there's a good chance pay packets are already shrinking in real terms.
1.48pm GMT
February's inflation data was the first time the ONS focused on the CPIH measure of inflation, which is "consumer prices index including owner-occupiers' housing costs".
As my colleague Katie Allen explains, this move is not without controversy:
Some economists say CPIH is lacking as a measure because by using figures based on "rent equivalence", it does not truthfully capture people's experience of the housing market. CPIH lost its status as a "national statistic" in 2014 and has yet to regain it.
Whether you measure wage growth against CPI, CPIH or RPI, it doesn't look good for most UK workers in 2017 https://t.co/6VDt4Z9593 @CIPD
After all the kerfuffle the CPI and CPIH #inflation figures are the same today anyway. The price of stuff increased by 2.3% in Feb
1.31pm GMT
Here in the UK, the big jump in inflation to 2.3% in February is in focus.
Philip Shaw, economist at Investec, says the Bank of England is unlikely to raise interest rates until 2019, despite rising inflation:
So far in 2017, CPI inflation is running ahead of the Bank of England's forecasts - February's outturn [of 2.3%] compares with a BoE projection of 2.1%.
UK markets reacted sharply to today's data. Sterling rose to $1.2470, its highest level against the dollar since late-February. Interest rate markets sold off, but remain sceptical of a hike this year, and are not fully pricing in a tightening until the second half of 2018.
The MPC looks likely to stand pat at least until 2018. But if the economy continues to hold up as well as we expect, interest rates could rise rather sooner than the markets have recently been anticipating.
1.13pm GMT
Time to take a look at the markets. The pound's gain is the FTSE 100's loss, as the modest gains made earlier have been erased.
Here's how it looks:
12.23pm GMT
On a busy day for UK data, the CBI has got in on the act with its latest industrial trends survey.
Manufacturers' expectations for growth were at the highest level in 22 years in March as export orders and output both rose at an accelerated rate.
It's been a strong month for UK manufacturers, with production growing robustly and overseas demand on the up. The past fall in the pound seems finally to be helping lift demand for UK manufactured exports, which rose at one of the fastest paces in this survey's history. And manufacturers are positive about the quarter ahead, expecting output to grow at the fastest rate since February 1995.
But the flipside is that cost pressures are widespread, and manufacturers expect factory-gate prices to continue to rise strongly over the next three months. And this will also put pressure on prices generally.
12.09pm GMT
Here's our full story on Mark Carney latest comments on the Charlotte Hogg debacle:
Related: Carney: deputy should not have had to quit over 'honest mistake'
11.54am GMT
Mark Carney was not amused when he was lobbed a question about today's inflation data during the Q&A on banking standards.
Asked what he made of the jump to 2.3% - a faster acceleration than the Bank expected - he answered rather abruptly that we shouldn't "overreact to a single data point".
11.43am GMT
The government borrowed 1.8bn in February, 2.8bn lower than a year earlier and the lowest amount for the month of February since 2007, before the financial crisis took hold.
So the government is still spending more than it earns, but economists had forecast higher borrowing of 2.1bn for last month. With just one month to go before the end of the fiscal year, borrowing totalled 47.8bn - 19.9bn less than at the same point last year. Tax receipts were strong last month, with income tax receipts up 13.3% and corporate tax receipts up 17.9%.
Some much needed good news for chancellor Philip Hammond as the February public finance data (and an upwardly revised January surplus) put him on track to meet the markedly lowered 2016/17 fiscal target contained in March's budget.
This is a particular relief for the chancellor as he has been under pressure after swiftly and embarrassingly scrapping his budget plans to raise national insurance contributions for the self-employed.
11.11am GMT
Carney suggests he did not want Charlotte Hogg to resign:
An honest mistake that is freely admitted for which a firm takes prompt remedial action is not a firing offence.
10.51am GMT
Bank of England governor Mark Carney is giving a speech on banking standards over at Threadneedle Street.
For those who have questioned whether we "get it", we do. We know this honest mistake was also a serious mistake - one that was compounded by the fact that Charlotte Hogg had overseen the development of our new code.
We were clear upfront that there must be consequences for both her and the Bank.
Carney on Hogg - who did not disclose her brother worked at Barclays - made "honest mistake" which was also a "serious one"
Related: Charlotte Hogg resigns as Bank of England deputy governor
10.37am GMT
UK inflation is on its way up...here's how it looks:
10.32am GMT
Lots of reaction coming in to the inflation data but first a quick look at some of the detail from the ONS report.
The main drivers of the sharper-than-expected rise in inflation were food and fuel prices. A sustained period of food deflation appears to be firmly over.
10.07am GMT
The larger-than-expected rise in inflation to 2.3% in February further closes the gap between the rise in prices and wage growth.
Inflation is now higher than wage growth (2.2% in the three months to January), signalling a return to falling real pay for UK workers.
Working people across the UK are now facing the double blow of rising prices and slower wage growth.
If the government doesn't wake up, we risk sleepwalking into another living standards crisis.
9.44am GMT
The pound is up 0.8% against the dollar after the sharp jump in inflation, to $1.2455.
Responding to the inflation figures, a spokesperson for the Treasury acknowledged that families are growing increasingly concerned about the rising cost of living.
A strong economy and sustainable public finances are vital to achieve rising living standards. The spring budget set out plans to build a stronger, fairer economy by investing in skills, schools, social care and cutting-edge technology, while continuing to bring down the deficit and live within our means.
The government appreciates that families are concerned about the cost of living, and that is why we are cutting tax for millions of working people, increasing the National Living Wage to 7.50 per hour from next month, and freezing fuel duty for the seventh year in a row.
9.34am GMT
Breaking: UK inflation rose to 2.3% in February from 1.8% in January. Food and fuel prices were the main drivers.
It's a bigger-than-expected rise after economists forecast 2.1%, and the highest level since September 2013.
9.26am GMT
The pound is up 0.5% against the dollar, at $1.2412.
The annual inflation rate is expected to rise to a three-year high of 2.1% in February from 1.8% in January, which in theory raises the prospect of an interest rate hike.
9.13am GMT
The UK house builder Bellway has warned on possible labour shortages after Brexit because the industry is so reliant on workers from abroad.
The big thing for construction industry is we have a reliance on overseas labour, and [the question is], will it have any impact on people not wanting to live in the UK or will it stop further people coming to the UK to help us meet the housing demand?
We're not going to able to build the number of units completely off the UK workforce.
Shares in Bellway now stand above where they were before the Brexit vote. It's a far cry from June. To all those who bet against UK housebuilders in what was a bloodbath for the sector on June 24th [the day after the referendum], the last few months have been a lesson in fundamentals. The likes of Taylor Wimpey and Persimmon are also back to pre-referendum levels. Redrow has surged well past that level. Bovis is the laggard and left itself open to a takeover as a result.
Part of it is down to the resilience of the UK economy and in particular the continued strength of consumer spending and confidence. The Bank of England played its part too in slashing interest rates to help boost confidence and ensure access to credit was not about to be a problem. This was an important signal at the time. Mortgage rates and availability remain very supportive.
8.46am GMT
Europe's main indices are up this morning.
The FTSE 100 is up by a modest 4 points at 7,433 as investors ponder Theresa May's decision to trigger Article 50 next Wednesday, formally kickstarting divorce proceedings with the EU.
8.23am GMT
Also coming up today is UK public finances data for February, which will show how much the government borrowed over the month and reveal how the chancellor is doing as the fiscal year to the end of March 2017 draws to a close.
In Philip Hammond's Spring budget earlier this month, the outlook for the public finances was revised to show lower borrowing over the coming years than previously expected - partly because economic growth has been more resilient.
7.59am GMT
Here is our preview story on the UK inflation data, out at 9.30am:
Related: Rising prices set to push inflation over 2% Bank of England target
7.57am GMT
Traders at IG, the spread-betting firm, are expecting markets to be pretty subdued when trading gets underway in Europe this morning:
Our European opening calls:$FTSE 7431 up 1
$DAX 12068 up 15
$CAC 5018 up 5$IBEX 10222 up 8$MIB 19954 down 15
7.51am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It's UK inflation day, and it is expected to a significant one. The consumer prices index has been rising since October and the latest data from the Office for National Statistics is expected to show a further rise in February to 2.1% from 1.8% in January.
We still expect inflation to surpass 3% over the summer. But we do not expect the MPC to respond by raising rates unless there is a material acceleration in pay rates, a scenario which data earlier this week suggest is unlikely for now.