UK inflation set to go higher

With Energy companies passing on huge increases in costs to the UK consumer in the region of 18%, it will come as no surprise when Inflation moves further away from the target of 2%.

It is widely expected that the CPI figure will come in at 4.6%, for the month of August against 4.4% in July. The Bank of England has already conditioned the markets to expect inflation to hit 5% at some stage and it will be touch and go as to whether we finish the year at this level.

The target level of 2% is still on the Bof E's "to do" list, postponed a couple lof years maybe but is unlikely to be acheived with fuel and energy prices rising at current rates.

When energy prices do come off the current highs, how responsive do you think the Utility and Fuel companies are going to be as they no doubt reveal record profits in due course ?