Fleet News

Inflation will continue to rise warns Bank of England

Inflation in August was 4.7%, far above the government’s target of 2%, and is predicted to peak at 5% later this year.

In a letter to the chancellor, the governor of the Bank of England, Mervyn King, said inflation has risen sharply from 2.1% in December to last month's high.

He said monetary policy is partly to blame, but “unanticipated” issues such as increases in the price of energy and food are also to blame.

“These price rises have led to sharp increases in headline inflation rates around the world,” said Mr King.

He also pointed out that sterling has depreciated by 15% since its peak last July – the fall in the value of sterling pushes up import price inflation.

“Inflation is likely to remain markedly above the target until well into 2009,” warned Mr King.

In response to the deepening problem, the chancellor Alastair Darling, said: “Clearly this is a challenging time for the UK economy.”

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee