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UK inflation at four per cent, soon to be five
Business digest: Rising oil prices and VAT hike push inflation over target for 14th month
Inflation rose to four per cent last month, up from 3.7 per cent in December 2010, according to new figures released by the UK Consumer Prices Index (CPI).
The governor of the Bank of England, Mervyn King, has written to the government saying that he believed "inflation would fall back" but that it was "about as likely to be above the target as below it two to three years ahead".
The CPI measure of inflation has now been a percentage point or more above the target for 14 months, putting pressure on the Bank of England to raise interest rates to tackle the problem.
The figure has been attributed to the latest VAT rise, the weakness of the pound and recent rises in commodity prices. One of the biggest factors is the rising price of oil, which the Office for National Statistics says pushed petrol to a record high of £1.27 per litre in January.
Inflation is expected to hit five per cent in the coming months.
Read a full report at BBC News. ·
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Don't care. I've no mortgage anymore, no car and no credit card debts. I'll weather this ok. Do I care for others? As much as they care for me.