UK consumer price inflation rises to 4.4 percent

[August 16, 2011]  LONDON (AP) -- Rising rents and banking fees pushed Britain's annual inflation rate up to 4.4 percent in July.

The rate reported by the Office for National Statistics Tuesday was up from 4.2 percent recorded in June.

The increase does not come as much of a surprise, as Bank of England's governor Mervyn King recently warned that the rate could rise to over 5 percent in the coming months in the wake of rising utility bills.

The ONS said the upward pressure on prices came from several different factors, but mainly from rising rents, higher fees for financial services like arranging a mortgage, and from volatile bread and cereal prices.

Even though inflation is running at double the Bank of England's target of 2 percent, rate-setters have refrained from raising borrowing costs given subdued economic growth levels.

The markets expect the Bank's main interest rate to remain at the record low of 0.5 percent for many months to come.

[Associated Press]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.