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UK inflation hits 2.5%

By newbusiness
Created 21/03/2008 - 10:32

Consumer inflation in the UK hit its highest level in nine months but only because of a new way of calculating energy bills, according to the Office for National Statistics.

The Consumer Prices Index reached 2.5% on a year-by-year basis, taking it well above the government's target of 2.0%.

But without the new method for energy bills the figure would have stayed at 2.2%, the ONS said.

The Retail Price Index, which also includes mortgage payments, remained at 4.1% while core inflation - which omits food and fuel - fell to 1.2%, the lowest rate since August 2006.

Concern over rising inflation is the biggest obstacle to the Bank of England being able to boost the economy by lowering interest rates.


Source URL:
https://www.newbusiness.co.uk/news/uk-inflation-hits-25