UK inflation hits 15-month high

Inflation has unexpectedly lifted to a new record, albeit well below the BoE’s target.

The Bank of England, led by Governor Mark Carney, is targetting a 2 per cent inflation rate. Picture: AFP/ Toru Yamanaka.

Britain’s inflation rate has risen unexpectedly to its highest level in 15 months, driven by higher airfares over the Easter period.

The Office of National Statistics on Tuesday said that the annual inflation rate rose to 0.5

per cent last month, up from 0.3 per cent in February. It was slightly higher than consensus forecasts of 0.4 per cent.

The rise was driven by airfares, which climbed 22.9 per cent, and by clothing, which rose 1.7 per cent.

Despite the increase, the rate remains well below the Bank of England’s 2 per cent target.

Ben Brettell, senior economist at Hargreaves Lansdown, says talk of higher interest rates on the back of Tuesday’s rise was premature as the “overall trend remains weak.” The pound rebounded slightly on the news to $US1.4308.

AP