The annual rate of UK inflation has risen in the month of August from 4.4% to 4.7%, a jump which is higher than was expected by many industry experts.
A letter to the chancellor, the Bank of England governor Mervyn King has warned that inflation could ruse to 5%. Mr King has blamed the increase in food and energy prices as a reason as to why inflation is above the government target of 2%.
The largest contributor to the rise in inflation in August was higher gas and electricity prices, with a number of large energy firms raising prices during the month. This outweighed the reduction in oil and petrol which fell by 5.5 pence per litre between July and August.
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