King writes to Chancellor as CPI hits 3.3%

The Consumer Price Index (CPI) has risen from 3% in April, partly due to rapidly rising fuel and food costs. The sharp rise in prices means the Governor of the Bank of England, Mervyn King, must write to the Chancellor, for only the second time in over a decade, to explain what measures he is taking to control inflation. King’s letter is likely to hint at interest rate rises later in the year, which will hit mortgage holders particularly badly as lenders have already risen rates in recent months. A broader measure of price growth, the Retail Price Index (RPI), rose from 4.2% to 4.3%, ...