UK inflation rose from 2.1% to 2.2% in January with rising transport costs mostly to blame, figures from the Office for National Statistics have revealed.

The retail price index, which includes mortgage payments, also rose, from 4.0% to 4.1%.

The news confirms the Bank of England's fears that inflation is likely to increase and could mean it is unable to cut interest rates as much as it would like to boost the flagging economy.

Meanwhile, separate figures from the British Retail Consortium revealed that UK retail sales rebounded from the worst Christmas in three years by rising 2.6% in January compared to figures for the previous year.

Signs that consumer spending is still relatively strong would also count against further interest rate cuts.