The Office for National Statistics said consumer prices were unchanged last month, which took the annual rate of inflation up 0.6 percentage points to 4.4 per cent.
This was both the biggest jump and the highest rate since the data series began in 1997, and left inflation far above the Bank of England’s two per cent target.
Analysts had predicted a rise to 4.1 per cent and interest rate futures fell on the report as dealers bet interest rate cuts to boost the slowing economy were unlikely soon.
Economists said even a rise in interest rates in the next month or two could not be ruled out.
“It is very disappointing data with widespread signs of higher price pressures,” said Philip Shaw, chief economist at Investec. “It will undoubtedly convince some members of the Monetary Policy Committee to vote for higher rates but we doubt they will reach a majority.”
Bank of England policymakers had seen these figures at their meeting last week when they left rates unchanged at five per cent. Their new quarterly forecasts due today are almost certain to show a much higher near-term inflation profile.
Their economic growth outlook, however, is likely to be much lower. Recent data point to an economy teetering on the edge of recession as house prices slide and consumer confidence crumbles.
The chief culprit for the inflation spike was soaring food prices. They were up a record 13.7 per cent on the year as the cost of meat, particularly bacon, ham and poultry, has risen sharply.
Bread and cereal prices also shot up. Overall, food and non-alcoholic beverages added 0.28 percentage points to the annual CPI rate.
Higher petrol prices also played their part in lifting inflation as the figures were collected before much of the recent sharp slide in oil prices. Crude oil prices have shed more than $30 a barrel from their peak above $147 in mid-July.
Still, the inflation rate is expected to shoot higher in the next two months, possibly even reaching 5 per cent as some utility companies have announced tariff rises of more than 30 per cent.