Bank chief's warning of rise in inflation
Bank of England chief Mervyn King warned households yesterday to expect above-target inflation to stay for "a year or so" after another sharp rise in the cost of living last month.
In a letter of explanation to Chancellor George Osborne, Mr King said inflation – which hit 3.2 per cent in October – could rise further still.
But he repeated assurances that factors pushing up inflation were likely only to be temporary and stuck by last week's Bank of England forecast for inflation to drop back to the two per cent target in 2012.
Mr King said: "CPI inflation is expected to remain above target, and at a somewhat higher level than expected three months ago, for a period of a year or so."