King: inflation to get worse before it gets better

Bank of England governor Mervyn King has warned inflation will spiral further away from the governmen...

Bank of England governor Mervyn King has warned inflation will spiral further away from the government’s 2% target over the next six months and may go over 4%. He blamed unanticipated food, fuel gas and electricity price rises for the figures in a letter to chancellor Alistair Darling. The letter was sent because of a mandate established during Gordon Brown’s chancellorship which necessitates an explanation from the governor if CPI rises over 3%. “As things stand, inflation is likely to rise sharply in the second half of the year, to above 4%,” said King. “I must stress, however, tha...