Bank of England governor Mervyn King will have to write to the Chancellor yet again after inflation moved further away from the Government's 2% target in August.
Consumer Price Index (CPI) annual inflation rose to 4.7% last month from 4.4% in July, the Office for National Statistics (ONS) says, as rises in gas and electricity bills took effect.
However, retail prices index (RPI) inflation fell to 4.8% per cent in August, down from 5% in July.
Electricity prices rose 18%, up from 12.6% in July, the ONS says, while Gas inflation soared to 27.7% in August, up from 12.9% in July.
Food inflation continued to move upwards, reaching a record 14.5% on the year, up from 13.7%, largely due to a rise in cereals and breads, particularly breakfast cereals and pizzas.
The ONS says there was a large downward effect from transport costs due to a decrease in the average price of fuels and lubricants.
Petrol prices fell by 5.5p per litre between July and August this year, to stand at 113.3p, compared with a fall of 0.6p last year. Diesel prices fell by 6.7p per litre this year, to stand at 125.6p.
The ONS says the main factors affecting the RPI were the same as those influencing the CPI, but it says additionally there was a large downward contribution from housing where the effect came mainly from mortgage interest payments and depreciation.
Last year most lenders passed on a quarter point increase in the Bank rate which led to an increase in average mortgage interest payments whereas this year the Bank rate was unchanged. Both mortgage interest payments and depreciation are excluded from the CPI.
RPIX inflation – the all items RPI excluding mortgage interest payments – was 5.2% in August, down from 5.3% in July.
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