The unexpected increase in British inflation last month shows there can be no complacency about rising prices, finance minister Jeremy Hunt said on Wednesday, adding that he did not think central banks were over-reacting.

"Only a week ago we found that inflation had actually gone up from 10.1% to 10.4%, and I think that demonstrates there can be absolutely no room for complacency," Hunt told parliament's Treasury Committee.

On central banks, Hunt said: "I don't believe they are over-reacting, I think there is still inflationary pressure in the economy - I am very concerned about it and I think we need to keep our eye on the ball." (Reporting by William James, Writing by Andy Bruce, Editing by Kate Holton)