Submitted on Tuesday 17th April 2007
Inflation breeches limit
The Office of National Statistics has reported that inflation has risen to 3.1%, up 0.3% from February. This means Mervyn King, the governor of the Bank of England will be required to explain in writing to Gordon Brown why the Consumer Price Index has risen over 1% above government targets.
This is the first time the MPC has been required to explain itself to the government since it took control of interest rates in 1997. Many now feel a further interest rate rise is expected to be announced in May, which would bring the base rate to 5.5%.
