In the letter, King said: “As things stand, inflation is likely to rise sharply in the second half of the year, to above 4 per cent. I must stress however, that there are considerable uncertainties, in both directions, around this, and any such projection is particularly sensitive to changes in domestic gas and electricity prices.”
King expects the rate of inflation to peak towards the end of this year, as long as there are no “unexpected increases in oil and commodity prices”.
The governor has only had to write to the Chancellor once before, when inflation hit 3.1 per cent in April 2007.
The ONS says food and non-alcoholic beverage prices were the largest contributors to the rise in the consumer prices index to 3.3 per cent in May, up from 3 per cent in April and 2.5 per cent in March.
The all items retail prices index rose by 4.3 per cent, up from 4.2 per cent in April. Over the same period, the all items RPI excluding mortgage interest payments index rose by 4.4 per cent, up from 4 per cent in April.
Housing and household services due to gas, electricity and other fuels, and recreation and cultural activities also contributed to the increase in inflation, says the ONS.