Inflation to top 4% June 17th, 2008

The Governor of the Bank of England has warned that consumer inflation could top 4% this year as increases in food and energy costs continue to push up inflation. Mervyn King was speaking after the Office for National Statistics (ONS) said the Consumer Prices Index (CPI) rose by 3.3% in May.

The news won’t come as a shock to many of us who have experienced first hand increasing petrol prices, utility bills and the cost of food shopping. Mr King also hinted that such rises are set to increase further over the coming months. The question many people will now be asking is ‘where next for interest rates?’. We could soon get the double whammy of rising living costs and higher mortgage repayments.