UK inflation unexpectedly jumped to 10.4% in February

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

Annual consumer price inflation rose to 10.4 percent in February, the Statistical Office announced on Wednesday. That’s up from 10.1 percent in January and higher than the 9.9 percent among economists polled by the Bank of England and Reuters.

Core inflation, which excludes fluctuating food, energy, alcohol and tobacco prices, also rose sharply to 6.2 percent in February from 5.8 percent the previous month. This exceeded economists’ expectations for a 5.7 percent slowdown.

Chancellor Jeremy Hunt said: “Falling inflation is not inevitable, so we must stick to our plan to halve it this year.”

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

This is a developing story.