INFLATION PICKS UP ACROSS OECD

London, March 29 (WSJ)- Consumer prices in the developed economies rose at the fastest pace since October 2008 in February, driven by energy and food inflation.

The pickup in inflation rates to their highest levels since the intensification of the financial crisis in the wake of Lehman Brothers' collapse is likely to lead to a round of interest-rate rises at a time when growth remains fragile in many parts of the developed world.

Figures released by the Organization for Economic Cooperation and Development Tuesday showed consumer prices in its 33 member states rose by 2.4% in the 12 months to February, having risen by 2.2% in the 12 months to January.

Rising energy and food prices are the main source of inflation. In the 12 months to February, food prices rose 3%, having risen by 2.6% in the 12 months to January. Energy prices rose by 10.1%, having risen by 8.4% in the 12 months to January.

However, there are few signs that prices of other goods and services are rising at a more rapid rate as the global economy recovers. The core rate of inflation in the OECD area -which excludes very volatile items such as energy and food- was unchanged at 1.3% in February.

Nevertheless, a number of leading central banks appear poised to raise their key interest rates in response to the pickup in inflation. The Bank of Israel on Monday raised its key rate to 3% from 2.5%, and the European Central Bank has signaled it will raise its key rate to 1.25% from 1% next week.

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