Inflation reaches highest level since 2008

Inflation has risen sharply, taking Britain's annual rate to a 30-month high of 4.5 per cent and calling into question how long the Bank of England can keep interest rates at a record low.

Rocketing Easter travel costs and increased duty on alcohol and tobacco are being blamed for April's rise in prices, which have taken the UK's consumer price index to its highest point since October 2008.

The rise has meant Mervyn King, Governor of the Bank of England, has once again had to write to Chancellor George Osborne explaining why inflation is above the government's 2 per cent target.

King blamed the rise in VAT earlier this year as well as high commodity and import prices. "It is likely that had they not occurred," he wrote, "inflation would have been substantially lower, and probably below the target."

Read a full report on the Guardian.  ·