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UK Inflation Jumps To 4Pc
Price growth in the U.K. accelerated in the first month of the year to a rate double the target set by the central bank, although officials continue to argue that the inflationary pressure is “temporary,” according to The Daily Telegraph.
Price growth in the U.K. accelerated in the first month of the year to a rate double the target set by the central bank, although officials continue to argue that the inflationary pressure is temporary, according to The Daily Telegraph. On Tuesday, the Office for National Statistics reported that the consumer price index for the U.K. reached 4% in the year ending to January, which is the highest level in over two years. The latest inflation rate is twice the target rate of 2% set by the Bank of England, and represents an acceleration from the 3.7% annual rate recorded in the previous month.
The Governor of the central bank, Mervyn King, was forced to write a letter to Chancellor George Osborne explaining the high inflation, and he pointed to surging energy costs and the increase in the value-added tax for the surge. King said that inflation could get as high as 5% in the coming months, warning, There is a great deal of uncertainty about the medium-term outlook for inflation. The Governor also warned that inflation could remain high for two or three years. The report from the ONS also showed that the retail prices index jumped to 5.1% from 4.8% the previous month.
Click here to read the story on inflation from The Daily Telegraph.
Click here for coverage of King's warning from The Daily Telegraph.