UK inflation exceeded the Bank of England's 2 percent target in February for the first time since 2013, on weak pound and rising oil prices.

Moreover, factory gate prices rose at the fastest pace since December 2011 signaling much more inflationary pressure in the pipeline.

Inflation accelerated more-than-expected to 2.3 percent in February from 1.8 percent in January, figures from the Office for National Statistics showed Tuesday.

This was the biggest rise in prices since September 2013 and above the expected rate of 2.1 percent.

After declining for 31 consecutive months, food prices gained 0.3 percent year-on-year in February.

Month-on-month, consumer prices grew 0.7 percent in February, faster than the expected 0.5 percent increase.

The consumer prices index including owner occupiers' housing costs, moved up 2.3 percent annually, the highest since September 2013, following a 1.9 percent rise in January.

ONS began to treat the CPIH as the first figure in its statistical releases starting March. The CPI is still used as the government's and central bank's target for inflation.

Likewise, core inflation that excludes energy, food, alcoholic beverages and tobacco prices, rose to 2 percent from 1.6 percent in January. The rate was expected to rise marginally to 2.1 percent.

The latest inflation jump is set to give more fuels to the hawks on the BoE's rate-setting body.

At the March monetary policy meeting, policymaker Kristin Forbes sought a quarter point rate hike as she cited quickly rising inflation and the possibility of the figure staying above target for at least three years.

February's CPI figures have increased the chances of an earlier interest rate hike than markets have been expecting, Ruth Gregory, a UK economist at Capital Economics, said.

That said, given the uncertainty around the Brexit negotiations and the fact that there has been little sign of rising domestic cost pressures, there doesn't seem to be any immediate pressure on the MPC to raise interest rates, the economist added.

IHS Markit economist Howard Archer said the BoE will remain tolerant on the inflation overshoot given the prolonged, highly uncertain outlook that the UK economy will face as the government negotiates the exit from the EU.

In a separate communique, the ONS said output prices climbed 3.7 percent year-on-year, in line with expectations, and the eighth consecutive increase. This was the highest since December 2011. Prices had climbed 3.6 percent in January.

From January, output prices grew 0.2 percent in February, compared to the consensus of 0.3 percent.

Following the Brexit vote in June 2016, the rate of input inflation has steadily grown. The figure was a double-digit 19.1 percent, but smaller than January's 20.1 percent. Economists had forecast the rate to stagnate at 20.1 percent.

On a monthly basis, input prices slid 0.4 percent, in contrast to a 1.6 percent rise in January and confounded economists' expectations for a 0.1 percent increase. Prices declined for the first time in three months.

House price inflation rose to 6.2 percent in January from 5.7 percent in December, continuing the strong growth seen since the end of 2013, the ONS said.

Another official report showed that the budget deficit declined to its lowest level for the month of February since 2007 and came in below economists' expectations.

Net borrowing excluding public sector banks dropped by GBP 2.8 billion year-on-year to GBP 1.8 billion, which was lowest for February since 2007. Economists had forecast GBP 3.2 billion borrowing.

In the current financial year-to-date, public sector net borrowing excluding banks decreased by GBP 19.9 billion to GBP 47.8 billion. The figure was the lowest year-to-date borrowing since the financial year-to-date ending February 2008.

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