Inflation remains above 3%
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Inflation remained above 3 per cent in July, forcing the governor of the Bank of England to write to George Osborne for the third time this year.
According to the Office of National Statistics, the Consumer Price Index dropped to 3.1 per cent, down from 3.2 per cent in June but still more than 1 per cent above the target figure. As a result, governor Mervyn King will have to write to chancellor George Osborne to explain why inflation remains high.
The ONS says the inflation rate can be blamed on increased fuel prices as well as a drop in the price of second-hand cars compared to 2009 prices.
It also revealed the Retail Price Index dropped to 4.8 per cent, down from 5 per cent in June.
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Readers' comments (2)
Anonymous | 17 Aug 2010 12:30 pm
Time to give savers a break instead of mortgagors and raise interest rates a tad. the problem for industry is availablilty of credit, not the price of it.
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John Whipple | 17 Aug 2010 3:00 pm
They are not going to increase interest rates - they want inflation to erode the debt as far as they can get away with it. also it just puts the cost of the repayments up.
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