Osborne set for first 'inflation misses target' letter - papers

UK inflation probably accelerated to a three-month high in April as higher energy costs and the weak pound stoked prices enough to prompt a letter of explanation from Bank of England governor Mervyn King.

Consumer prices rose 3.5% from a year earlier, compared with a 3.4% increase in March, according to the median of 27 forecasts in a Bloomberg survey of economists. That would leave inflation above the Government's 3% upper limit three months after the previous breach, requiring King to write to the Chancellor of the Exchequer George Osborne. The Bank of England said on 12 May that inflation may be faster than previously forecast in the coming months, before it slows below the 2% target and keeps undershooting the goal because of slack in the economy. King told reporters Britain ...