Inflation could top 5%, King warns

The governor of the Bank of England has warned inflation could top 5% because of rising inflation expectations and higher commodity prices.

Mervyn King says in the latest MPC minutes released today there is "a significant risk inflation will exceed 5% in the near term." The warning comes after inflation figures yesterday showed Consumer Prices Index (CPI) inflation had jumped to 4.4%, ahead of expectations. King adds inflation could be more of a long-term issue than expected. "The period of elevated inflation could persist for longer than the Committee expected. "That might happen if the expected persistence of inflation above the target in the near term caused expectations of higher inflation to become ingrained, l...