Inflation rises to 3.2%

Dearer clothes and shoes, as shops marked up their prices after the January sales, pushed the headline rate of inflation to 3.2% in February. This figure is up from 2.9% in January.

Prices for seasonal vegetables, which were in short supply, also contributed to the inflation hike.

The underlying rate, which excludes mortgage interest payments, rose to 3.0% from January's figure of 2.7% - the highest level since May 1998. Underlying inflation has now been above the government's 2.5% target for four consecutive months.

Despite the rise, the City did not expect the Bank of England's Monetary Policy Committee to increase interest rates, which are at their lowest level since 1955.

The February RPI also saw changes to the basket of goods that are used to calculate inflation.

The price of a cup of caffe latte joins the shopping basket of 650 goods and services that are considered central to modern lifestyles, as are a takeaway burger and a kebab.

But out goes tinned spaghetti and frozen fish in sauce.

Brown ale is out, replaced by draught premium lager.

On the vanity front, designer spectacles, slimming clubs and hair and shower gels are in.