24/03/2009 - Surprise hike in UK inflation
Official figures show the UK`s annual rate of inflation rose unexpectedly to 3.2% last month, driven by rising food and drink prices.
According to the Office for National Statistics (ONS), the Consumer Prices Index (CPI) went up from 3% in January by 0.2% in February.
The head of the Bank of England, Mervyn King, will now write to Chancellor Alistair Darling to explain why inflation is still more than 1% above the Government's 2% target.
It is thought the shock hike was caused by retailers looking to offset higher import costs from the weak pound by increasing the price of groceries, with food and drink inflation rising by 11.5% on an annual basis in February.
However, it is believed poor yields of crops in Spain and rising transport costs are also to blame for the price increases.
Figures also show the Retail Prices Index (RPI) fell to zero in February from 0.1% in January thanks to plummeting housing costs.
Copyright © Press Association 2009
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