As reported in the media today ....
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‘The UK government's targeted rate of inflation rose in July, following higher prices for clothing and footwear and fees for financial services.
The rate of Consumer Prices Index (CPI) inflation rose to 4.4% from 4.2% in June, according to figures from the Office for National Statistics (ONS).
The Retail Prices Index (RPI) measure was unchanged at 5%.
Clothing and footwear prices measured for CPI saw their biggest annual increase since records began in 1997.
Bank of England governor Mervyn King has written another letter to the chancellor to explain why CPI inflation remains well above the 2% target rate.
The governor must write a letter every three months if CPI is more than one percentage point above or below the target.
He blamed the continuing high inflation rate on, "the increase in the standard rate of VAT to 20%, and past increases in global energy prices and import prices".
He also stressed that "the big risks currently facing the UK economy come from the rest of the world".’
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