The Consumer Price Index rate of inflation has hit its highest level since September 2013, rising to 2.3 per cent in the year to February 2017.

It is an increase of 5 per cent from January 2017, up from 1.8 per cent, statistics published by the Office for National Statistics have revealed. It said rising transport costs, particularly for fuel, were the main contributors to the increase in the rate.

The figure is above the Bank of England’s target rate, and will cause a further “headache” for the Bank, Aberdeen Asset Management investment manager James Athey has said. “Their forecasts predict a slowdown in coming months so the last thing that they want to deal with is inflation being above target. It’s unlikely that they’ll do anything imminently but they really need to start considering getting rates back to where they were before the referendum.”

“It was a pre-emptive cut that, whether warranted or not, has turbo-charged the depreciation in sterling and given the Bank this inflation headache. Don’t expect much anytime soon though. Raising rates would be a proactive and forward thinking move. Two things that the Bank of England isn’t particularly well-known for.”

In addition, Brown Shipley deputy chief investment officer and senior fund manager Alex Brandreth said: “Inflation has gradually moved higher in the UK over the last year, with today’s figures above the Bank of England’s target and at their highest levels since September 2013.

“We expect this trend to continue over the next few months mainly due to the impact of a weaker sterling and the increase in commodity prices, particularly in oil since its lows at the beginning of 2016. Sterling began to fall following the UK’s decision to leave the EU last summer, suggesting inflation is likely to continue to creep higher over the next few months as Article 50 is triggered next week.”

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