Inflation climbed marginally in August as expected, driven up by higher utility bills.
The Consumer Prices Index (CPI) measure of inflation rose to 4.5% last month, the Office of National Statistics (ONS) said, up from 4.4% the previous month.
Meanwhile RPI - which includes house prices - rose to 5.2% from 5% the month before.
The Bank of England's target rate for CPI is 2%, and it expects inflation to return to target in the next two years.
The move higher is expected to be repeated in the coming months as energy price rises continue to feed through.
With no shock jump, sterling strengthened marginally immediately after the release, while the yield on ten-year gilts fell.
Having been weaker all morning, sterling strengthened from $1.5776 to $1.5791, while the yield on gilts fell from 2.34% to 2.33%.
Trevor Greetham, portfolio manager, Fidelity's Multi Asset Funds
"At 4.5%, UK headline CPI has hit its highest level since a brief period in the summer of 2008. However, year on year inflation will almost certainly drop back into the Bank of England's one to three percent target range in the New Year when the January 2011 hike in VAT drops out of the calculation.
"Stripping out food and energy costs, core CPI is likely to be at the bottom end of that range, supporting the additional monetary ease that appears increasingly necessary with the economy teetering."
Chris Williamson, chief economist, Markit (from BBC)
"The rate is likely to move higher in coming months as utility bills continue to increase, putting further pressure on already-strained household budgets," said
"However, inflation should start to fall by the end of the year, and drop significantly next year as those factors which have driven the rate up this year, such as January's hike in VAT from 17.5% to 20%, high oil and food prices and the depreciation of sterling all move into reverse."
Jonathan Loynes, Capital Economics (from BBC)
"August's consumer prices figures brought further hope that the peak in inflation is close. We still expect inflation to be well below its 2% target at the end of next year."
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