UK Inflation Pushed Higher By Rising Oil Prices

The UK inflation rate has risen to its highest level in a year on the back of high oil prices and increasing transport costs.

The latest official figures from the Office of National Statistics show that the consumer prices index (CPI) rose to 1.5% last month, up from just 1.2% in April.

Concerns over inflationary pressures have led the Bank of England to raise interest rates to 4.5%, with two rate increases in the past two months. The bank’s governor, Mervyn King, has also given a clear indication that there may be further interest rate rises on the horizon.

Meanwhile, the UK’s previously targeted underlying Retail Prices Index rate of inflation, which excludes mortgage repayments, rose at an annual rate of 2.35, up from just 2% in the previous month.

Other factors that helped push UK inflation higher last month were seasonal increases in air and sea fares. However, these movements were partially offset by a small downward contribution from second-hand car prices, which fell this year but rose slightly a year ago.

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