Energy bills send inflation to 9-month high
UK inflation rose in February at its fastest pace since May last year as energy companies increased gas and electricity prices, new figures revealed today.
A report from the Office for National Statistics showed annual CPI inflation running at 2.5% last month, more than the 2.2% seen in January, but in line with economists' expectations.
It was the fifth month in a row that inflation has been above the government's 2% target, which gives the Bank of England a headache as it looks to cut interest rates but avoid fuelling inflation.
Prices were up 0.7% on the month, the biggest rise since May 2001, but again, pretty much as expected.
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The ONS attributed the increase to changes in the basket of goods used to calculate data and the reflection of energy bill hikes in full this month rather than spread over four months, as before.
Without these changes the annual figure would have stayed at 2.2% and excluding food, energy, alcohol and tobacco, inflation would be just 1.2%, the weakest read since August 2006.
In addition, the report had annual retail price inflation (RPI) at 4.1% in February, unchanged from the month before, but slightly lower than the 4.2% expected. The monthly rise was 0.8%.
