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Inflation hits nine-month high

Inflation hit a nine-month high last month, according to the latest figures from the Office of National Statistics (ONS).

The consumer prices index (CPI) stood at 2.5 per cent in February, up by 0.2 per cent on January.

The ONS said the rise was due to a change in the methodology, but food and fuel prices continue to serve as significant inflationary pressures.

Mortgage holders will hope this does not dissuade the Bank of England from cutting interest rates when it meets next month.

The bank's monetary policy committee (MPC) is expected to reduce the cost of borrowing for the second time in three months, but inflationary pressure could put that decision off.

As a result of the credit crunch, mortgages, credit cards and personal loans have become harder to obtain.

While a rate cut will not resolve that problem overnight, it should go some way to relieving the pressure and raising consumer confidence.

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