Inflation in Britain rose to a near five year high last month as clothes prices soared following the ending of the winter sales. The government's preferred measure of inflation, RPI-X (retail prices excluding mortgage interest payments) jumped 0.5pc in February from January and was up 3.0pc on a year-on-year basis, National Statistics (NS) said this morning. The annual rate was the highest since May 1998 and ahead of the 2.9pc rate expected. It also marks the fourth straight month that inflation has remained above the 2.5pc government target.
Clothes and footwear prices rose more than 2pc last month, while inflation was also boosted by rising oil prices amid uncertainty over the crisis in Iraq. Crude oil has surged by more than a third in the past four months as the US builds up to war in the Gulf. Overall retail prices rose 0.5pc on the month and were up 3.2pc from a year earlier, according to NS. The February inflation figures were calculated using a new basket of goods, with takeaway caffe latte, golf green fees and diet aid drink powder now replacing products such as brown ale, frozen fish in sauce and vinyl floor covering. //www.fxcentre.com