Mervyn King: Inflation has now peaked

The Office for National Statistics yesterday revealed consumer price index inflation hit 5.2% in September, up from 4.5% the previous month. However, in a speech to the Institute of Directors in Liverpool last night, Mervyn King explained why it would begin to fall and how that was shaping the Bank's policies. He said: "In contrast to headline inflation, domestically generated inflation remains subdued - and on some measures barely above zero. Increases in energy prices, import prices and VAT account for the current high level of inflation. "Once the effect of these temporary facto...