The Bank of England did not appear too concerned about inflation last week in presenting its quarterly inflation report, but the numbers have to start coming down soon. The April rate for consumer price inflation, up from 3.4% to 3.7%, should represent the peak, though there are significant uncertainties such as the timing of any VAT hike and other tax nasties, though these should not properly be regarded as inflationary.

CPI has risen from 1.1% in September to 3.7% now and the Bank will be hoping its reversal is just as dramatic. RPI inflation has gone from minus 1.4% to 5.3%. RPIX, the retail prices index excluding mortgage interest payments, is now at 5.4%, more than double its old target of 2.5%. CPI is a long way from its 2% target. More here.

The governor's letter to the chancellor, his first to George Osborne, is here. And this is Osborne's letter, referring to the inclusion of housing costs in the target measure at some stage.