Tuesday, August 12, 2008
Inflation hits 4.4%
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

A poor set of inflation figures, with the headline consumer price inflation rate rising from 3.8% to 4.4% and even the core rate, excluding food, drink, tobacco and energy, climbing from 1.6% to 1.9%. The 4.4% rate was not only above economists' predictions but saw UK inflation rise above that in the eurozone, which had a 4.1% rate in July.

According to the Office for National Statistics, food price inflation has "spiralled" to 13.7%, while gas and electricity bills were up by 16.1%. RPI inflation rose from 4.6% to 5%, while RPIX (excluding mortgage interest payments) saw a rise from 4.8% to 5.3%. Like CPI, this is more than double the target (the old RPIX target was 2.5%). Further details here.

The Bank of England will get a lot of criticism for these figures. It will be hoping the drop in oil prices - just above $110 this morning - and other commodities continues.