UK’s April inflation rate soaring

The UK’s inflation rate has soared to its highest pace since 2002 in April, which made it difficult for the Bank of England to aid economic recovery. As a result, interest rates were kept unchanged.

The Office for National Statistics said today that consumer prices have increased by 3 percent from last year, and this is the highest in 13 months.

This is well above the expended level, as analysts had expected a rate of only 2.6 percent.

Prices also rose by 0.8 percent on the month, which is the highest in almost seven years.

The Bank of England’s Governor, Mervyn King, is now on the verge of having to write to the chancellor explaining how the central bank will bring inflation and prices under control if the 3 percent ceiling is hit.

The problem facing the policy makers is that manufacturers have hiked their prices at the sharpest rate in over 22 years in a period where the economy is slowing.

This is further accentuated by the fact that the housing market survey released earlier today has shown the property market downturn is continuing and is likely to remain stagnant.

This has also affected government gilts and the value of the pound, which both fell after the report showed inflation caused mainly by food and energy prices, is now within 0.1 percent of the government’s limit.

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