LONDON, March 22 Reuters Sterling jumped on Wednesday after data showed UK price pressures picked up a lot more than expected in February, including inflation that excludes food and energy, raising the chances of another rate rise this week from the Bank of England.

British consumer price inflation CPI unexpectedly rose to 10.4 in February from January39;s 10.1, figures from the Office for National Statistics showed on Wednesday.

Economists polled by Reuters had forecast the annual CPI rate would drop to 9.9 in February.

The pound was last up 0.3 against the dollar at 1.225, from a 0.1 gain prior to the data. The euro fell 0.3 against the pound to 87.86 pence, from 88.00 pence earlier.

Big unexpected jump in UK inflation this morning, breaking a threemonth stretch of prior declines. This is a real problem for the Bank of England, which will need to stay the course on further rate rises, increasing the probability of recession later in the year, John Leiper, chief investment officer at Titan Asset Management, said.

Money markets show a 61.6 chance the Bank of England BoE will raise rates by a quarter point when it meets on Thursday, up from around 57 on Tuesday.

The core CPI, which excludes energy, food, alcohol and tobacco and is watched closed by the BoE, rose to 6.2 from 5.8 in January, versus a forecast decline to 5.7.

The annual inflation rate in the services sector, which most policymakers consider a good measure of underlying price pressures, rose to 6.6…