Inflation jumps as energy costs kick in

Energy bill hikes sent the UK's rate of inflation soaring to a nine-month high in February, official figures showed today.

The recent double-digit price increases saw the Consumer Prices Index (CPI) - the official measure of inflation - rise to 2.5 per cent in February from 2.2 per cent in January, according to the Office for National Statistics (ONS).

Households have been hit by increases in gas and electricity tariffs from all but one of the six main suppliers this year as providers have sought to pass on rises in wholesale energy costs.

The ONS confirmed that this spike in inflation was largely down to a change in the way it calculates inflation to reflect the trend for price increases to come into effect sooner.

Instead of phasing in increases over a four-month period, the ONS last month moved to include gas and electricity rises from the day they are introduced, which saw all of this year's bill increases kick in in the February data.

The ONS said CPI inflation would have remained unchanged at 2.2 per cent last month if it had not made the change in methodology.

A rise in the cost of beer and cigarettes also had an upward effect on CPI last month, as did higher price tags for food.

Cheese, milk and bread prices rose by 17.6 per cent on an annual basis last month - the largest rise since records began in 1997.

But there was a small downward effect from drops in the cost of fruit and vegetables compared with a year ago, with strawberries in particular seeing a decline in price.

Ongoing surges in the cost of oil - which yesterday hit a new intraday trading high near 112 US dollars a barrel - have also added to the pressure on inflation.

The ONS said petrol rose by 0.1p between January and February to 104p a litre compared with a fall of 0.3p a year ago.

Higher petrol prices are set to continue to push up inflation, while the changes made in this year's Budget are also set to see CPI rise.

The Retail Prices Index (RPI) - often seen as a more representative measure of inflation as it includes the cost of housing - remained unchanged last month at 4.1 per cent.