U.K. Inflation Breaks Through BOE Target at 2.3%

The video discusses the UK CPI basket, focusing on food, fuel, and recreation prices, which are sensitive to sterling. The fall in sterling is affecting inflation faster than expected by the Bank of England. Despite external inflation, domestic cost pressures remain low, with wage growth stagnant. Inflation is now matching wage growth, impacting real income and potentially affecting the economy. The video also covers base effects and forecasts inflation to peak at 2.7-2.8% by the end of 2017, with temporary effects like a surge in food prices due to poor harvests in Europe.

What are the implications of wage growth being muted in relation to inflation?

What specific event caused a surge in food prices according to the text?