ECB says Middle East war could cause higher inflationary pressure and warns of potential ‘sharp drop in output’

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Shoppers faced a surprise jump in grocery inflation last month, as experts warned there was worse to come if there was prolonged war in the Middle East and the odds of a UK interest cut fell sharply.

In a blow to households struggling with the cost of living, grocery price inflation rose to 4.3% in the four weeks to 22 February, after falling to 4% in January from 4.7% in December, according to the market research company Worldpanel by Numerator.