Inflation rises on the back of VAT increases

The Consumer Price Index (CPI) rose last month to 4.1% from 3.7% in December.  The Retail Price Index (RPI), which includes mortgage interest payments, also rose, from 4.8% to 5.1%. CPI is now double the Bank of England’s target of 2% and at its highest level since November 2008; it will lead for further calls for a rise in interest rates. This rise has been blamed on higher fuel prices and the recent rise in VAT. Following the inflation figures announced today Mervyn King, the Govenor of the Bank of England has been forced to ...