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News - 16 September 2008
UK inflation rises to 4.7% in August
The Office for National Statistics (ONS) has reported that higher energy and food bills sent the Consumer Price Index (CPI) 0.3% higher last month but the broader measure of the Retail Prices Index (RPI) fell to 4.8% from 5%.
The RPI is important because it is often quoted in wage settlements negotiations which the government is desperate to keep as close to the 2% inflation target as possible.
The Bank of England's Monetary Policy Committee has not been able to consider a cut in interest rates to boost the flagging UK economy because inflation has risen so far above the government target. But with the sharp fall in oil prices from their high of nearly $150 a barrel three months ago, some analysts are optimistic that inflation could be near its peak and will start to fall naturally towards the end of the year.
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Bank of England
Office of National Statisitics