Inflation rises to 11 year high
UK inflation soared to 4.4% in July, taking it to the highest level since the current measure began in 1997.
The rate of inflation rose by 0.6% in July alone, the biggest single increase over the same period.
A major factor for the increase is rising energy and food prices, which have now increased 13.7% year-on-year on the back of a surge in the cost of meat.
The Bank of England’s quarterly inflation report warned that before inflation dropped it was likely to rise to 5%.
The data will scupper any hope that the Bank of England will cut interest rates for the foreseeable future and raises the possibility of a rise in a bid to bring inflation under control.
However, analysts expect commodity prices to stabilise by the end of the year, meaning interest rate cuts may once again be a genuine possibility.
