Inflation as measured by the Consumer Price Index (CPI) rose to 2.3% in February – up from 1.8% in January, according to the latest figures from the Office for National Statistics (ONS).
This is the highest rate since September 2013 and is above the Bank of England's target of 2%. The Bank previously said that it expects CPI inflation to peak at 2.8% next year.
The ONS has attributed the increase partly to rising fuel and food prices – the latter recording their first annual increase for more than two-and-a-half years.
The fall in the value of the pound since the Brexit vote, which makes imports more expensive, has been cited as a reason for the rise in food prices. However, the pound rose sharply after the news of the inflation rate, with Sterling rising by a cent against the dollar.
Anna Leach, Head of Economic Intelligence at the Confederation of British Industry (CBI), said: ‘While inflation has risen above the Bank of England’s 2% target, it is still relatively low by historical comparison. Nonetheless, inflation is likely to rise further still, on the back of stronger fuel prices and as the impact of the weaker exchange rate feeds through. Also, other price data indicates rising costs for businesses, with input prices up 19% on the year.’
The Retail Prices Index (RPI) measure of inflation rose to 3.2% in February from 2.6% the previous month.