Consumer prices rise in February

Britain's inflation rate rose for the first time in five months, edging up to 2% in February, official figures showed today.

The Office for National Statistics said the consumer prices index (CPI) - the main domestic measure of inflation for policymaking purposes - rose from 1.9% in January to hit the Bank of England's 2% target. Pressure on prices came mainly from the rising cost of computer games and books.

The cost of printer paper, furniture and carpets also contributed to the slight rise in inflation, which the City had anticipated. The only large downward effect came from transport as air fares fell in February for the second month in succession.

This was the first rise in the CPI since last September, when it hit 2.5% from 2.4%. Analysts described today's report as "benign" and broadly in line with the Bank of England expectations in the February inflation report.

"We expect inflation to remain contained over the coming months as growth is limited by largely muted consumer spending, wage moderation continues and competition remains strong," said Howard Archer of Global Insight. "Consequently, we still believe that the next move in interest rates is downwards."

The Bank's monetary policy committee last cut interest rates in August to 4.5%. Despite a weakening in consumer spending since late last year, the Bank has held rates steady amid concern that soaring energy prices will lead to higher wage claims and feed inflation.

The Bank is also keen to avoid any move that could overstimulate house prices, which have picked up since the start of the year.

Since hitting 2.5% last September, the inflation rate dropped steadily until it reached 1.9% in December and stayed there in January. The MPC's job is to set interest rates every month to keep inflation at 2% over a two-year period.

In its February report, the MPC forecast the CPI to remain close to 2% for the next two years.