LONDON (MarketWatch) -- British consumer inflation accelerated at a record pace in December, surprising economists and putting inflation concerns back on the Bank of England's radar after exceeding expectations for a big price jump as a result of comparisons with December 2008.

The Office for National Statistics on Tuesday said prices rose 0.6% compared to November. Prices were up 2.9% compared to December 2008. That compared to a 0.3% monthly rise and a 1.9% year-on-year rise in November.

The one-percentage-point jump in the annual rate between November and December was the largest rise since current records began in 1997, the ONS said.

Economists had forecast a 0.2% monthly rise in December and a 2.5% annual jump. A big annual rise was expected as a result of comparisons to December 2008, when a range of extraordinary factors served to knock the consumer price index down by a record 0.4% from November.

The British pound GBPUSD, +0.14% spiked higher on the data then subsequently trimmed gains. The pound changed hands in recent action at $1.6372 versus the dollar. The euro fell 0.7% versus sterling to 87.38 pence.

British gilt futures slumped, falling 68 basis points to 114.52.

Economists said the data reinforce ideas the Bank of England won't extend its 200 billion pound ($326.7 billion) asset-buying program, centered on British gilts, when its Monetary Policy Committee meets on Feb. 4.

The program makes up the bank's quantitative-easing program, the money-creating plan that was implemented in March 2008 in an effort to boost prices and stave off deflation.

"This morning's shock will put inflation firmly back on the agenda," said Azad Zangana, European economist at Schroders.

To be sure, the ONS said a range of special factors were responsible for the jump in the annual inflation rate.

Among factors contributing to the annual jump, economists and statisticians noted the temporary reduction in the value-added tax charged on most goods to 15% from 17.5% took effect in December 2008. That means December 2009 marked the first month that the cut fell out of comparisons with the year-ago figure.

Also, since the VAT returned to 17.5% on Jan. 1, some retailers may have boosted prices last month allowing them to advertise that they weren't boosting prices in the new year, economists said.

Other factors from December 2008 that affected the comparison included a sharp fall in the price of oil and discounting by retailers in Christmas sales in the immediate wake of the financial crisis, the ONS said.

The expiration of the VAT decrease all but ensures that January annual inflation will jump above 3%, a threshold that requires Bank of England Governor Mervyn King to write a letter to the chancellor of the exchequer explaining why inflation has deviated by more than a full percentage point from the central bank's 2% target.

The Bank of England had warned that the VAT changes and other factors would lead to a near-term spike in inflation, but the December reading still means inflation is running faster than the central bank had forecast.

An annual December jump of 2.15% would have been required for CPI to hit the bank's forecast for average inflation of 1.85% in the fourth quarter, noted Richard McGuire, senior fixed income strategist at RBC Capital Markets.

"Although the BOE will continue to look to the considerable slack that has opened up in the economy as justifying its view the current inflation spike will prove a transitory affair, today's numbers make a compelling case for, at the very least, taking a breather as regards QE (quantitative easing)" when the bank's Monetary Policy Committee meets on Feb. 4, McGuire said.

Charles Davis, senior economist at the Center for Economic and Business Research, agreed that King will likely be required to write Chancellor of the Exchequer Alistair Darling a letter following the release of January inflation data, but argued that subdued lending and historically low earnings growth will likely allow inflation to fall back in 2010 "as the steady recovery leaves plenty of spare capacity."