The annual rate of inflation rose to 4.7 per cent in August, an increase on the previous month’s 4.4 per cent rate, following hikes to food and energy bills.
Food inflation reached a record 14.5 per cent on the year, up from 13.7 per cent in July, largely due to a rise in the prices of cereals, breads and meats.
Electricity prices rose 18 per cent year on year, according to the Office for National Statistics’ Consumer Prices Index. That compared with a 12.6 per cent rise in July. Gas prices rose 27.7 per cent year on year – up from 12.9 per cent the previous month.
Bank of England governor Mervyn King will now have to write again to Chancellor Alistair Darling to explain why inflation is higher than the Government’s target of 2 per cent.
The Retail Prices Index inflation fell to 4.8 per cent in August, down from 5 per cent in July.
Transport costs fell following a fall in the average price of fuels and lubricants. The price of petrol fell 5.5p a litre to 113.3p between July and August. Diesel prices fell 6.7p per litre to 125.6p a litre.
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