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Last Updated: Tuesday, 21 March 2006, 10:33 GMT
UK inflation edges up in February
UK inflation edged higher in February, according to figures from the Office for National Statistics (ONS).

Consumer price index (CPI) inflation rose to 2.0% from 1.9% in January, hitting the Bank of England's target.

The rise was mainly down to increased prices of items such as books, computer games and newspapers, and partly as a result of higher energy costs.

The rate of headline RPI - which includes mortgage interest payments - remained unchanged at 2.4%.

The ONS said the biggest upward impact on inflation came from goods in the recreation and culture category, with the price of computer games rising in February in contrast to a year ago.

The coming three months of data will be dominated by energy prices given utility bill hikes in excess of 20%
Alan Clarke, BNP Paribas economist

The latest figures were in line with analysts' forecasts and the Bank's own inflation report last month which predicted that inflation would remain close to 2% for the next three years.

'Benign' report

Although inflation rose for the first time since September last year, the news was expected to have little effect on rates in the short term.

"This is still a pretty benign report overall and broadly in line with Bank of England expectations contained in the February Inflation Report," said Global Insight economist Howard Archer.

Analysts added that while utility prices had risen recently, the effect of the increases were not likely to feed through until some time in the future.

"The coming three months of data will be dominated by energy prices given utility bill hikes in excess of 20%," Alan Clarke at BNP Paribas warned.

The last time the rate of CPI inflation increased was in September last year, when it rose from 2.4% to 2.5%.

It then fell in October, November and December before remaining unchanged in January.


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