London, Thanasis Gavos

UK inflation rose to 10.4% from 10.1% for the month of February, a surprising development as it comes after three consecutive months of decline.

According to the Office for National Statistics (ONS), a key factor in the increase was inflated prices of alcohol in pubs and food, partly due to shortages of fresh herbs in supermarkets.

The feeling and hope that had built up after peaking at 11.1% in October was that inflation would be on the decline for the rest of the year.

In its estimates accompanying the recent budget, the independent Office for Budget Responsibility predicted that by the end of the year the inflation rate would have fallen to 2.9%.

ONS chief economist Grant Fitzner said alcohol and food prices rose to their highest level in 45 years in February. He attributed this to shortages in some items due to bad weather in countries from which Britain imports and reduced domestic production due to high energy costs.

On the other hand, he added, there was a reduction in motor fuel prices, where headline inflation has now fallen for seven consecutive months.

Inflation data is also being studied by the Bank of England ahead of the key lending rate announcement on Thursday. Most economists forecast another 25 basis point hike to 4.25%.