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UK inflation rises to 4.5% in April

The Consumer Prices Index rate of annual inflation has increased to 4.5 per cent, up from 4 per cent in March.

Data from the Office of National Statistics shows air transport, alcohol, tobacco and gas were the main drivers behind the increase in inflation between March and April.

Petrol and diesel, clothing, footwear and communication all acted as downward pressures on the annual rate of inflation.

Annual inflation as recorded by the Retail Prices Index – the measure of inflation which takes account of mortgage interest payments – stands at 5.2 per cent in April, down from 5.3 per cent in March.

Last week, Bank of England Governor Mervyn King warned energy prices could push inflation up to 5 per cent by the end of the year.

In King’s letter to the Chancellor, which was published today, King said inflation would “probably” be below the Government’s inflation target of 2 per cent if it was not for increases in VAT, energy prices and import prices.

Cheviot Asset Management partner David Miller says: “”Today’s figures show that some elements of the CPI are rising well above the inflation index whereas others are not. Companies are raising consumer prices where they can to try to recover higher input costs. It is either higher prices or lower profits. Today’s numbers show who has pricing power and who does not.”

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  1. “In King’s letter to the Chancellor, which was published today, King said inflation would “probably” be below the Government’s inflation target of 2 per cent if it was not for increases in VAT, energy prices and import prices.”

    A bit like saying, “If it weren’t for the things which pushed inflation up, inflation would be down?”

    I’m something of a Mervyn King fan but, if he said this, it makes him look silly.

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