Inflation in the UK surged unexpectedly past the Bank of England’s target for the first time in almost two years, lifting the pound and adding to speculation about when monetary policy could be tightened.

Consumer prices rose 2.1% from a year earlier, the highest since July 2019, the Office for National Statistics (ONS) reported. Economists and the BOE had expected an increase of 1.8%.

Commenting on the report, Ian Warwick, managing partner at Deepbridge Capital, said: “(This) inflation data serves as further evidence that that the UK economy is moving in the right direction at a significant pace. For many early-stage businesses however, the significant rise in inflation may trigger fears of a subsequent rise in interest rates, directly impacting how much they are able to borrow at a crucial time, when many expected the economy to full reopen again.

“Therefore, the biggest problem for growing early-stage companies may be access to funding and as we focus on economic recovery, it remains critically important that scale-up businesses, particularly in high-growth sectors such as digital technologies and life sciences are supported; as they will be at the very heart of economic growth as we create an economy fit for the twenty-first century.”