High Petrol Prices Caused Record Inflation

Inflation in UK soared to 2.3 percent in July from 2% in June - the highest level since 1997 -on the back of surging petrol prices, the Office for National Statistics said.

It is the first time the Consumer Price Index (CPI), a new way of measuring which leaves out mortgage repayments, has risen above the 2 percent target since it was adopted in December 2003.

The Bank of England last week predicted inflation was likely to rise above its target on the back of sky-high oil prices.
However, the latest number is still above expectations and likely to douse expectations of further interest rate cuts ahead.

Petrol prices added 0.13 percent to the annual CPI rate as crude oil costs have risen, the ONS said.