A sharp increase in food prices pushed April’s Consumer Price Index (CPI) to 3.7 percent. This is well beyond the Bank of England’s target rate of 2.0 percent. According to the Office for National Statistics (ONS), higher energy costs were largely responsible for the jump in food prices which increased by 2.6 percent over the previous month.
As is required when inflation exceeds the target rate, Bank of England governor Mervyn King has written a letter of explanation to the new Chancellor, George Osborne. In his letter, the governor blamed rising fuel prices, the rise in VAT and the fall in the value of the pound for the rising trend.
Source: Bloomberg
