BRITISH INFLATION accelerated in October, and will probably keep rising in the coming months as rising oil costs, the weak pound and the reversal of a temporary cut in sales tax keep up the pressure on prices.

The Office for National Statistics said annual consumer price inflation picked up to 1.5 per cent last month from a five-year low of 1.1 per cent in September.

The increase was mainly due to statistical effects resulting from a sharp drop in fuel prices in October last year not being repeated this year, and had been widely anticipated by analysts.

The figures are unlikely to cause concern to Bank of England policymakers who had already pencilled in a near-term rise in inflation to well above its 2 per cent target and is unlikely to persuade them to tighten policy any time soon.

"I don't think this is anything that will worry the Monetary Policy Committee too much," said Amit Kara, economist at UBS. - (Reuters)