“U.K. inflation accelerated more than economists forecast in April to the fastest since October 2008, forcing Bank of EnglandGovernor Mervyn King to explain publicly why officials haven’t raised interest rates yet.
Consumer prices rose 4.5 percent in April after a 4 percent increase in March, data today showed. The median forecast of 32 economists in a Bloomberg News survey was 4.1 percent. Core inflation quickened to the fastest in at least 14 years. King said in a letter to Chancellor of the Exchequer George Osbornethat the surge is being driven by higher sales tax and increases in energy and import prices.
The pound rose after the London-based Office for National Statistics reported the inflation data. While King said inflation is likely to rise further in the next few months, he sees it easing toward the bank’s 2 percent target next year. The central bank signaled last week it may need to raise the key interest rate from a record low to control “uncomfortably high” price growth.”
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