Inflation up to 2.5%

12 September 2006

UK inflation went up to 2.5% last month; that’s the fourth month in a row that it’s been above the Government’s 2% target. Analysts say the latest figures will renew pressure on the Bank of England to raise interest rates.

In August, the Consumer Prices Index (the Government’s preferred method of measuring inflation) stood at 2.5%, a slight increase on July’s figure of 2.4%. According to the Office for National Statistics, it’s due to an increase in the price of computer games and toys.

Last month, the Bank of England increased interest rates by a quarter of a percentage point to 4.75%. The Bank’s interest rates committee voted to keep rates on hold in September, but some analysts now expect another rise in November.