Inflation has soared to its highest level in 20 years, leaving cash-strapped Britons even more out of pocket.

The Retail Price Index (RPI)  - which charts the cost of living, including mortgage payments - rose from 5.1 per cent in January to 5.5 per cent.

With average wage increases hovering around two per cent and savings accounts offering paltry interest returns, the figures will be a further blow to family finances.

In addition, the government's preferred measure of inflation, the Consumer Price Index (CPI), rose from 4 per cent to 4.4 per cent in February - a two-year high.

Soaring inflation rates will pile pressure on the Bank of England to raise interest rates from their historic low.