The Office for National Statistics has said that consumer prices leapt 0.5% in March, lifting the annual rate of inflation to 3.1%, which is the highest since the series began in 1997.

This is higher than the 0.3% that analysts had forecast. The surge may reinforce expectations of higher borrowing costs this year.

Retail price inflation has also risen to 4.8%, which is at its highest since July 1991. The Bank of England has raised borrowing costs three times since August 2006. It now stands at 5.25%, but it is widely expected that it will increase to 5.5% next month.