by business editor Trevor Sturgess

Hikes in fuel, clothing and shoes pushed up the cost of living last month to 4.4 per cent, the highest for two years.

With consumers facing pressures from all sides, and interest rates on savings failing to catch up, the Consumer Price Index (CPI) showed inflation had edged up from four per cent in January.

The CPI measure has now been one percentage point or more above the two per cent target for 15 months. Experts said it meant more misery for pensioners on fixed incomes and made an imminent rise in interest rates more likely.

Annual Retail Price Index (RPI) inflation, which includes housing costs, was 5.5 per cent, up from 5.1 per cent in January and the highest for 20 years.

Andy Weir, of Fidelity International, which has offices in Hildenborough, said: "With strong recent data, including falling unemployment, it seems quite likely that the rumoured rate hike on the 5th of May will happen. I expect this to be the peak in CPI and RPI for now barring yet another upswing in oil prices."

Upward pressure came from domestic heating costs, particularly gas where average bills rose by 0.4 per cent between January and February. There were smaller effects from electricity and domestic heating oil.

The cost of clothing and footwear shot up by 3.6 per cent following the January sales. Mortgage arrangement fees and foreign exchange charges pushed up the cost of other goods and services.
Alcohol and tobacco fell back by 1.1 per cent.