August’s inflation report from the Bank predicted that consumer price index (CPI) inflation would exceed five per cent before the end of 2011.
The last time CPI inflation stood so high was in September 2008.
August’s prices showed rises of 4.5 per cent. The retail price index (RPI), which is regarded by some as a better measure of the cost of living, increased by 5.2 per cent.
The CPI inflation target stands at two per cent, within one percentage point on each side. It has been above three per cent since January 2010.
The Bank says price rises should start to slow into 2012, as “temporary factors” like January’s VAT increase drop out of the figures.