Britain's annual inflation rate picked up much more than expected to a near seven-year high in March on bigger rises in airfares and petrol prices than a year ago, statistics showed today.
The Office for National Statistics said that the consumer price index rose an annual 1.9 per cent last month, much higher than the 1.7 per cent rise predicted by analysts and the 1.6 per cent rate in February.
The sharp upward move towards the Bank of England's 2 per cent target is likely to stoke concerns that policymakers may raise interest rates, currently at 4.75 per cent, further in coming months.
The ONS said airfares climbed more this March than at the same time last year and noted that the price collection period included the Easter public holidays, which last year fell in April.
There were also upward effects on inflation from bigger rises in petrol and diesel prices than a year ago. The RPI annual inflation rate was unchanged compared with February and at 3.2 per cent only slightly higher than the 3.1 per cent analysts had forecast.