Inflation has gone up again to its highest level in 30 years in the UK, which yet again casts a bleak picture for the cost of living crisis.

The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation rose to 6.2% in February, up from 5.5% in January and again reaching the highest level since March 1992, when it stood at 7.1%.

The rise was higher than expected and followed price increases on food, clothing and footwear and a range of products and services.

Rising energy costs to come in April and a further rise in gas prices because of war in Ukraine may also push this number up later in the year.

What does inflation mean for the average person though, and how does it work?

Bournemouth Echo: Inflation reduces the spending power of money (PA)Inflation reduces the spending power of money (PA) (Image: PA)

How does inflation work?

In finance, inflation refers to a general increase in prices and a fall in the purchasing value of money.

When the general price of items rises during inflation but the value of money stays the same, consumers can buy fewer items and goods for the same monetary sum.

What happens when inflation rises?

Higher inflation would mean people's money would have less and less purchasing power.

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As a result, savers may suffer and households may find it harder to stay within their budgets.

Coupled with an already-existing cost of living crisis and an energy cost hike, it will cause a tight squeeze for many households.

UK inflation rate history

Inflation rates in the UK have been at their highest level in the 1970s and 1980s, with the highest rate being at 24.21% in 1975 according to Macro Trends.

Then 1980 saw a rate of 17.97% after a dip, but since then it has fallen steadily, and has remained at very low levels since the mid-1990s until the last couple of years.