MPC more split than usual over inflation risks: King

In his now regular letter to Chancellor George Osborne to explain why inflation remains above the 2% target, Mervyn King said the consumer price index (CPI) will remain at a higher level than expected three months ago, for a period of a year or more. Annual CPI rose in October to a four-month high of 3.2%, up from 3.1% in September and higher than economists' forecasts. King blamed the upcoming January hike in VAT to 20% and increases in commodity and other world export prices, which he said have added to companies' costs and so to near-term inflationary pressure. But he revealed t...