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Rising food prices sent the UK's annual inflation rate surging to 3% last month in the sharpest increase in the cost of living in almost six years, the government said today.
Data from the Office for National Statistics revealed that the government's preferred measure of inflation - the Consumer Prices Index - was up by 3% in the year to April compared to 2.5% in the 12 months to March.
The scale of the increase came as a shock to the City and will severely dent hopes of an early cut in interest rates from the Bank of England to boost growth. Mervyn King, the Bank's governor, would have to write an explanatory letter to the chancellor, Alistair Darling, should inflation rise any further - only the second time this would have happened since Threadneedle Street was granted control over interest rates in 1997.
The Bank's nine-strong monetary policy committee were given an early sight of the inflation figure before deciding last week to keep the bank rate on hold at 5%. King will give his views on the state of the economy tomorrow when the Bank releases its quarterly Inflation Report.
The ONS said that prices in April alone rose by 0.8% - equalling the sharpest monthly rise since the CPI was launched 11 years ago. Food prices were up by 6.6% in the year to April, although clothing and footwear prices showed their sharpest annual decline since December 2002.
Today's CPI figures follow yesterday's record producer price inflation and will fuel fears of a period of so-called stagflation - the combination of rising inflation and slowing growth. The Royal Institution of Chartered Surveyors said today that activity was slowing markedly in the property market with virtually every estate agent in Britain reporting lower prices, while the British Retail Consortium said spending in the high street had fallen for the last two months.
Howard Archer at Global Insight said today's data was "another horrible surprise" on the inflation front, after the producer price data on Monday. "Given that the MPC had the consumer price inflation data last week, it is no wonder that they kept interest rates on hold." The chances of a June interest rate cut are "rapidly diminishing," he said.
Data from the Office for National Statistics revealed that the government's preferred measure of inflation - the Consumer Prices Index - was up by 3% in the year to April compared to 2.5% in the 12 months to March.
The scale of the increase came as a shock to the City and will severely dent hopes of an early cut in interest rates from the Bank of England to boost growth. Mervyn King, the Bank's governor, would have to write an explanatory letter to the chancellor, Alistair Darling, should inflation rise any further - only the second time this would have happened since Threadneedle Street was granted control over interest rates in 1997.
The Bank's nine-strong monetary policy committee were given an early sight of the inflation figure before deciding last week to keep the bank rate on hold at 5%. King will give his views on the state of the economy tomorrow when the Bank releases its quarterly Inflation Report.
The ONS said that prices in April alone rose by 0.8% - equalling the sharpest monthly rise since the CPI was launched 11 years ago. Food prices were up by 6.6% in the year to April, although clothing and footwear prices showed their sharpest annual decline since December 2002.
Today's CPI figures follow yesterday's record producer price inflation and will fuel fears of a period of so-called stagflation - the combination of rising inflation and slowing growth. The Royal Institution of Chartered Surveyors said today that activity was slowing markedly in the property market with virtually every estate agent in Britain reporting lower prices, while the British Retail Consortium said spending in the high street had fallen for the last two months.
Howard Archer at Global Insight said today's data was "another horrible surprise" on the inflation front, after the producer price data on Monday. "Given that the MPC had the consumer price inflation data last week, it is no wonder that they kept interest rates on hold." The chances of a June interest rate cut are "rapidly diminishing," he said.
