Tuesday 17th June 2008
The Office for National Statistics has confirmed that the Consumer Prices Index (CPI) rose by 3.3 per cent in May, forcing the governor of the Bank of England to write a letter of explanation to the Chancellor of the Exchequer.
According to the ONS, the 3.3 per cent increase is the biggest rise since the CPI measure was first used in 1997.
Inflation has been driven by the spiralling price of food and non-alcoholic drinks, with household energy bills, books, stationary and foreign holidays also noted as contributory factors.
However, the augmentation was offset in part by the fall in price of DVDs.
In his letter, Bank of England governor Mervyn King said that inflation was unlikely to fall in the near future.
"As things stand, inflation is likely to rise sharply in the second half of the year, to above four per cent," Mr King said.
"I must stress however, that there are considerable uncertainties, in both directions, around this, and any such projection is particularly sensitive to changes in domestic gas and electricity prices."
The Bank of England's governor has only had to write a letter to the chancellor to explain the reasons behind an inflation rate in excess of three per cent once before - in April 2007.
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