UK Inflation hits 17-month high at 3.7%

The Consumer Prices Index (CPI) hit a 17-month high of 3.7% in April, forcing Bank of England governor Mervyn King to write to new Chancellor George Osborne to explain why.

Year on year, CPI hit its highest rate since November 2008, rising 0.3% from last April’s reading of 3.4%. The increase beat expectations of a more conservative rise of 0.1%, and was well above the inflation target of 2%. King had to explain to Britain’s new Chancellor why the cost of living is more than a percentage point above the official target. Month-on-month CPI was 0.6%, matching the reading a month prior, but exceeding forecasts it would fall to 0.4%. The Retail Prices Index (RPI), a wider measure of inflation which includes mortgage payments, has leapt to its highest le...