News

UK inflation unexpectedly accelerated in February, adding to pressure on the Bank of England to raise interest rates again at its meeting on Thursday.

The annual rate of consumer price inflation rose to 10.4 per cent in February, the Office for National Statistics said on Wednesday. That was up from 10.1 per cent in January and higher than the 9.9 per cent forecast by the Bank of England and economists polled by Reuters.

Core inflation, which strips out volatile food, energy, alcohol and tobacco prices, also rose sharply to 6.2 per cent in February, up from 5.8 per cent the previous month. That exceeded economists’ expectations of a slowdown to 5.7 per cent.

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

Financial markets have priced in a 62 per cent probability that the Bank of England will raise rates by 25 basis points on Thursday.

This is a developing story.

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