British inflation rate jumps to seven-year high in March

The annual rate of inflation in Britain rose to a near Seven-year high of 1.9 percent in March, putting pressure on the Bank of England to increase interest rates, official figures showed Tuesday.

The Office for National Statistics (ONS) said the unexpected rise in inflation rate was mainly caused by price rises in petrol and air fares, food and furniture.

It said the biggest upward effect on Consumer Price Index (CPI) came from transport costs, with airfares rising more than a year ago.

Record oil prices also appeared to impact on British CPI again last month with bigger rises in petrol and diesel prices contributing to the sharp upward move.

The ONS noted that CPI was also pushed up by furniture where recoveries in prices were stronger than at the same time a year ago. Clothing and footwear as well as food and non-alcoholic beverages also boosted prices.

"This is a nasty surprise ... that significantly increases the chances of an interest rate in hike in May," said Howard Archer, economist at Global Insight.

The figure is much higher than the 1.6 percent annual inflation rate recorded in February but still within the government's 2 percent target.

However, this would keep Monetary Policy Committee members of the Bank of England wary about inflation risks going forward, analysts said.

The British central bank has kept the interest rate steady at 4. 75 percent since last August although two of the nine committee members voted for a hike at the monthly pace-setting meeting in March.

Source: Xinhua