Inflation jumps to 3.7% as commodity prices soar

The annual Consumer Price Index (CPI) rate has now reached an eight month high at 3.7%, up from 3.3% in November. Annual inflation as recorded by the retail prices index (RPI), including mortgage interest payments, stood at 4.8% in December from 4.7% in November. Today's figures are likely to increase calls for the Bank of England's Monetary Policy Committee to up the base rate to combat the increasing inflationary pressures on the UK economy. However, some analysts warn such a move would "choke off" the tentative recovery. The recent VAT rise from 17.5% to 20% could further fue...