Yahoo Finance Petrol price rise fuels the biggest leap in inflation in six months
Inflation rose the fastest in six months during January due to higher prices at the petrol pumps.
The flagship consumer prices index shot up 1.8%, faster than the 1.6% forecast by analysts, and much higher than the 1.3% posted in December.
The larger-than-expected increase was driven by higher petrol prices, which rose 4.7% from last year.
A surge in house prices also contributed, the Office for National Statistics said.
The figures are likely to dispel expectations of a Bank of England rate cut this year.
The 1.8% rise was broadly in line with Bank forecasts.
Pantheon Macroeconomics chief UK economist Samuel Tombs said: “This upward trend in domestically generated inflation should remain intact over the coming months ensuring that the monetary policy committee holds back from cutting bank rates this year.”
The Bank, set to be led by incoming governor Andrew Bailey, has forecast inflation will fall below its 2% target for the rest of the year.
It expects inflation to be 1.3% for the third quarter and remain subdued for the next two years.
The pound rallied, surging past the $1.30 mark having fallen in early trading.
