March 19 (Bloomberg) -- U.K. inflation probably accelerated to the fastest pace since October 2008 in February, which may sharpen the divide among Bank of England policy makers on whether to raise interest rates to tame price pressures.
Consumer prices rose 4.2 percent from a year earlier compared with a 4 percent increase in January, according to the median forecast of 32 economists in a Bloomberg News survey. The Office for National Statistics in London will publish the data at 9:30 a.m. on March 22.
Inflation has held above the central bank’s 2 percent target for 14 months after commodity prices surged and the pound’s 25 percent drop on a trade-weighted basis since the start of 2007 boosted import costs. Bank officials split four ways at last month’s policy meeting as they gauged the threat from inflation against the sustainability of the recovery.
“Increases in food and energy prices are creating upward pressure on inflation and that will persist for the next few months,” Adam Chester, an economist at Lloyds TSB Bank Plc in London, said in a telephone interview. “It will come back down as the economic environment remains weak.”
The Bank of England’s nine-member Monetary Policy Committee, led by Mervyn King, held its benchmark interest rate at a record low of 0.5 percent this month. Minutes of the meeting to be published a day after the inflation data will show if any other officials voted with Andrew Sentance, Martin Weale and Spencer Dale for a rate increase.
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