Rising fuel and food prices have pushed U.K. inflation to a three-year high. The Office for National Statistics (ONS) said U.K. inflation for the month of February hit 2.3 percent, up from 1.8 percent in January and above the Bank of England's (BoE) 2 percent target. Rising fuel prices and food prices, which had been suppressed for the past three years, dragged prices to their highest level since September 2013.

"There has been a sustained period of deflation of food prices since mid-2014, during which the 12-month rate was often lower than negative 3.0%, the ONS said. "Although the increase in price of 0.3% between February 2016 and February 2017 is small, this equates to a 0.02 percentage points upward contribution to the 12-month rate, which marks the first time that food prices have had an upward effect since April 2014."

The BoE had forecast inflation to hit 2.8 percent in 2018, but the faster-than-expected increase in February is set to push that figure above 3 percent, something the central bank is uncomfortable with but also something it may not be able to control. (See also: Will Inflation Continue to Rise?)

After the Brexit vote and the sharp fall in the British pound, import prices rose, dragging inflation higher, putting the BoE between a rock and a hard place. At last week's meeting, one member of the BoE committee voted to raise interest rates for fear of rapid inflation. However, the central bank opted to keep its quantitative easing (QE) program and policy rates unchanged with uncertainty around Brexit still hovering over markets. (Further reading: Countdown to Brexit: What Is Article 50?)

With the next meeting not until early May, the central bank could head to the meeting with rapid inflation and stalling Brexit negotiations.

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