Inflation tipped to hit 10-year high - papers 17 June

Economists expect that figures released today will show that the Government's main inflation measure rose to 3.2% last month, as sharp increases in food and fuel prices continue to feed through. Should the forecast prove correct, Governor Mervyn King will have to write to the Chancellor Alistair Darling explaining why inflation has strayed more than one percentage point above its 2% target. The letter would be only the second one the Bank's Monetary Policy Committee has been forced to write and will be an embarrassment for both the Chancellor and the Governor. THE CREDIT CRUNCH tight...