The rate of inflation unexpectedly sped up in February, increasing the pressure on the Bank of England to raise interest rates ahead of its meeting tomorrow (March 23).

Inflation rose to 10.4 per cent last month, the Office for National Statistics said today (March 22).

The rate had increased from January’s figure of 10.1 per cent, and rose above the 9.9 per cent forecasted by the Bank of England and economists polled by Reuters.

ONS chief economist Grant Fitzner said the rise in prices was driven by rising alcohol prices in pubs and restaurants following discounting in January.

“Food and non-alcoholic drink prices rose to their highest rate in over 45 years with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing,” he said.

These were partially offset by a drop in the cost of petrol.

Chancellor of the exchequer, Jeremy Hunt said: “Falling inflation isn’t inevitable, so we need to stick to our plan to halve it this year.”

The unexpected acceleration of inflation comes one day before the Bank of England meets to decide whether to raise the base rate of interest.

Nicholas Hyett, investment analyst at Wealth Club said weaker banks outside the UK are “starting to pop” under the pressure of the rapid rise in interest rates seen in the past year.

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