Inflation could rise to more than 4%
17 June 2008
The rising cost of food and energy has pushed UK consumer inflation up from 3% in April to 3.3% in May, and the rate is set to rise further.
Official figures from the Office of National Statistics show the Consumer Price Index (CPI) rising at the fastest rate since records began 11 years ago.
As inflation is now running at more than 1% above the Government’s target of 2%, the Governor of the Bank of England has been required to write to the Chancellor explaining what measures will be taken to try and control prices.
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In his letter Governor, Mervyn King said; “As things stand, inflation is likely to rise sharply in the second half of the year, to above 4%”.
The Governor did say there were a number of uncertainties and that his forecast was particularly sensitive to changes in gas and electricity prices.
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