UK CPI rises to 10.4 in February from 10.1 in January
Economists polled by Reuters had expected 9.9
Food and drink prices rise at fastest rate since 1977
Some signs of easing price pressures at factories
Bank of England expected to raise rates by 25 bps to 4.25

LONDON, March 22 Reuters British inflation unexpectedly rose to 10.4 in February, pushed up by higher food prices and pricier drinks in pubs and restaurants, official data showed on Wednesday, a day before the Bank of England announces its latest interest rate decision.

Economists polled by Reuters had forecast that the annual CPI rate would drop to 9.9 in February from January39;s 10.1 and move further away from October39;s 41year high of 11.1.

The BoE is due to announce on Thursday whether it has raised interest rates for an 11th meeting in a row.

Investors are split on whether it will pause its run of increases in borrowing costs because of the recent upheaval in the global banking sector.

Given the market movements of late, this puts the Bank of England in an incredibly difficult position as it may not be enough for the Bank of England to press pause on the rate hikes, Richard Carter, head of fixed interest research at Quilter Cheviot, said.

Sterling rose against the dollar and the euro after the data was published.

Interest rate futures showed a 100 chance that the BoE would raise rates by at least a quarter point, up from just over 50 late on Tuesday.

The ONS said that an end to January drinks…