Not so great news, as this may make mortgages more expensive...
The headline rate of UK inflation hit a 17-month high last month – raising fears that the Bank of England may be forced to raise interest rates sooner than expected.
The fact that inflation hit 3.7% in April is likely to come as a surprise to the City which had been expecting an increase of 3.5%, compared with March’s figure of 3.4%.
The jump prompted the governor of the Bank of England to write an open letter to chancellor George Osborne explaining why the government’s inflation rate target of 2% had been missed by such a large margin.
The bank has previously said that it expects a spike in inflation at the start of 2010 before returning to more normal levels.
King also blamed the impact of higher oil prices, the restoration of VAT to 17.5% and the continuing impact of the weaker pound.
Read more: http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3163659&c=1#ixzz0oIe5cKvl
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