As a result, the governor of the bank Mervyn King has been obliged to send a letter of explanation regarding the inflation figures of 3.1 per cent for March to the chancellor Gordon Brown.
Mr King wrote in the letter: “I am surprised that it has taken ten years and 120 meetings of the monetary policy committee (MPC) before a deviation of inflation from target sufficient to trigger a letter has arisen.”
“When the MPC was set up in 1997 the chances of going almost ten years without an open letter being triggered seemed negligible,” he continued.
Meanwhile, the rise in inflation rates is widely regarded as increasing the likelihood of an increase in the cost of borrowing in Britain next month, a decision which would heighten the debt management concerns of millions of consumers.
In response to the latest CPI announcement, Howard Archer, chief UK and European economist at Global Insight, reflected: “This is a thoroughly nasty set of data that essentially guarantees that the Bank of England will raise interest rates by a
further 25 basis points to 5.50 per cent in May.”