UK inflation came in hotter than expected in February, rising to 10.4% from 10.1% in January and confounding expectations of a fall to 9.9%.
Figures from the Office for National Statistics (ONS) showed that the consumer prices index (CPI) rose 1.1% month-on-month, following a fall of 0.6% in January.
The largest upward contributions to the monthly change came from restaurants and cafes, food, and clothing, partially offset by downward contributions from recreational and cultural goods and services (particularly recording media), and motor fuels.
Food price acceleration came as shortages were seen for salads and other vegetables during the month, while alcohol prices in restaurants and pubs were also driven higher.
CPI including owner occupiers' housing costs (CPIH) rose by 9.2% in February 2023, up from 8.8% in January.
The largest upward contributions to the annual CPIH inflation rate came from housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages.
On a monthly basis, CPIH rose by 1.0% in February 2023, compared with a rise of 0.7% in February 2022.
Simon French, chief economist at Panmure Gordon, described the number as “much hotter”.
He said: “Whilst there will be an argument for holding the UK rate at this week’s MPC meeting given recent financial sector turbulence, this probably tips the balance for a data-dependent Bank of England towards 25bp.”
John Leiper, chief investment officer, Titan Asset Management said the unexpected jump "is a real problem for the Bank of England, which will need to stay the course on further rate rises, increasing the probability of recession later in the year".