Inflation surges to 4.7 percent

Source: Exec Digital UK

Date :16/09/2008 10:41:08

Inflation in August has rocketed to its highest level since April 1992.

The cost of living is up again, with the August figure – 4.7 percent – greater than July’s 16-year high of 4.4 percent and continuing to rise far above the Government's two percent target.

Households are struggling with costlier utility bills, with the average gas bill now 30 percent higher after the UK's largest energy suppliers increased prices while electricity now costs, on average, 15 percent more.

Food prices also rose by 1.3 percent during August, according to ONS statistics, pushing grocery bills up by 13 percent in the 12 months to August.

Today's rise will force the Bank of England Governor, Mervyn King, to write his third letter to Chancellor Alistair Darling to explain why inflation remains so far above the Government's target.

It has also dented hopes of an imminent rate cut as the Bank of England is unlikely to adjust rates until it sees evidence that inflation is falling.