Inflation update

Further to my post last week, see an article from today's telegraph below.

Even with their CPI/RPI fix inflation is heading steadily skyward. Hope you can all persuade your bosses to giv eyou good pay rises come January!

News:
Inflation hits highest level in nine years
By Edmund Conway Economics Editor
275 words
13 September 2006
The Daily Telegraph
001
English
(c) 2006 Telegraph Group Limited, London
LARGE rises in gas prices and food costs have unexpectedly pushed inflation higher, increasing the likelihood that the Bank of England will have to raise interest rates again before the end of the year.
The Consumer Price Index rose from 2.4 per cent to 2.5 per cent in August, Government figures showed. This equals the highest rate since Labour came to power nine years ago.
The Office for National Statistics also disclosed that gas bills had risen by almost 40 per cent in the past year - the biggest rise since records began in 1963. The figure does not take into account the most recent increases ann-ounced by gas providers.
Economists warned that households might have to endure another rise in borrowing rates later in the year. Last month, the Monetary Policy Committee unexpectedly raised interest rates to 4.75 per cent and may raise them to five per cent in November.
The Bank of England aims to keep inflation close to two per cent and one of the most effective ways to lower prices is to raise borrowing costs.
Mervyn King, the Bank's governor, has warned that there is an even chance that inflation will hit three per cent in the next six months and that it is likely to rise even further during the next two years.
Mortgage lenders were yesterday urged to ensure that borrowers could afford repayments after it was revealed that 750,000 people had missed a payment over the last year. Citizens Advice said young people were most likely to miss a payment.