The pound has surged against the dollar after the Office for National Statistics (ONS) reported inflation hit 2.3%, well ahead of January’s 1.8% reading and surpassing investors’ expectations.

The jump in the consumer prices index takes inflation above the Bank of England’s 2% target and is above the 2.1% reading investors had been expecting. The retail prices index, which includes the impact of mortgage costs, rose to 3.2% in February, up from 2.6% in January.

That sent the pound, which had been rallying ahead of the data, 0.8% higher against the dollar to $1.245.

The ONS said rising transport costs, particularly for fuel, were the main contributor to the rise. Prices for food meanwhile rose in the year to February, after 31 consecutive months of price falls.