Huge surge in rate of inflation

Inflation surged to its highest level for 15 months. Under the Retail Prices Index (RPI), the inflation rate was up to 3.7% in January from 2.4% at the end of 2009.

The rise came as the cuts in interest rates continued to fall out of official calculations and VAT was restored to 17.5%. Under the Consumer Prices Index (CPI), inflation rose to 3.5% in January from 2.9% the previous month.