Latest figures from the Office for National Statistics (ONS) show that annual inflation as measured by the Consumer Prices Index reached 1.8 per cent last month, up from a rate of 1.6 per cent in December.
It is the fourth consecutive month that the rate has risen and takes inflation to its highest since June 2014.
Head of inflation at the ONS, Mike Prestwood, says: "The costs of raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound."
Chris Williamson, chief business economist at analysts IHS Markit, adds: "While the further upturn in price pressures will fuel speculation that interest rates may start to rise later in 2017, the most likely scenario remains one of policy staying on hold over the next two years as the economy navigates through Brexit.
"Further upward pressure on prices looks inevitable in coming months as energy costs continue to climb and firms pass rising costs on to customers, pushing inflation up towards 3.0% in the second half of the year.
"Wage growth has crept up to 2.8%. However, our expectation is that it will slow, or at least remain muted, in 2017 as the labour market cools, providing the Bank of England with leeway to keep policy on hold."
With UK inflation cutting disposable income, the weaker pound and a business landscape fraught with uncertainty, it is understandable that business owners are concerned. However, due to the size and nature of their businesses, SMEs have the advantage of being able to be flexible and quick to respond to changing market conditions. The key is to partner with the right specialist adviser who will guide you on your strategy and assist in making those all-important business decisions that will have the greatest impact on future success.
At Beavis Morgan, we know that running your own business can be very rewarding, provided the right structures are in place. We are well versed in working with SMEs and owner-managed businesses of different sizes across a range of industry sectors, so you can rely on our detailed understanding of the specific kinds of issues that can arise, and you can count on our expertise and ability to provide the right solutions.