British inflation surged to its highest in nearly five years in February, but analysts say the jump would not stop the Bank of England (BoE) cutting interest rates again.
The Office for National Statistics said today that RPIX, which excludes volatile home loan payments, rose by 3.0 per cent year-on-year in February, up from 2.7 per cent in January. That was the highest since May 1998 and beat consensus forecasts for a rise of 2.9 per cent.
The headline measure of inflation, RPI, rose 3.2 per cent in February from 2.9 per cent, its fastest pace in 2.5 years.
Separately, data showed inflation in the 12-country euro zone picked up to an 11-month high of 2.4 per cent.
The pickup in inflation came as recent sharp declines in clothing and footwear and seasonal food prices eased. Moreover, higher oil prices did not contribute as much to the rise as some analysts had predicted.
Economists are predicting the BoE may cut rates further from their current 48-year low of 3.75 per cent in coming months to prop up a faltering economy.
In its own forecasts made in February, the BoE predicted an acceleration in inflation above its government-set 2.5 per cent target before falling back again later this year; many analysts said there was no cause for concern yet.