Bank of England Governor Mervyn King said Thursday that inflation was likely to rise to above 4 percent by 2009 due to rising food and fuel prices, but suggested a slowing economy could eventually bring it under control.
"The Monetary Policy Committee's current judgement is that inflation is likely to rise to above 4 percent before the end of the year," above the bank's 2 percent target, he told lawmakers, referring to the bank's rate-setting committee.
"The immediate cause of the rise in inflation we are seeing now is a change in the prices of food and energy relative to other prices," he said, adding that "we believe that a slowdown in the economy is needed this year to ensure inflation returns to the target."
King said that higher food and energy costs would not result in sustained inflation unless other prices and wages rise at a faster rate, and the Bank of England's Monetary Policy Committee, which sets interest rates, "is focussed on preventing that."
Britain's inflation rate has risen from 2.1 percent at the start of the year to 3.3 percent in May. The Bank has trimmed its key interest rate from 5.5 percent to 5.0 percent in two steps starting in February, but has held off further cuts amid inflation worries.
Raising rates to fight inflation, however, could dampen an economy already suffering from a collapsing housing market and expectations growth will slow.
World's most powerful nuclear submarines, Arkhangelsk and Severstal, are to be dismantled after 2020 - their further exploitation is unprofitable
The United States' Head of Diplomacy, or Secretary of State, is an anachronistic, incompetent, meddling, intrusive, insolent and arrogant, rude individual, a brash, foul-mouthed upstart, a conceited, self-important guttersnipe and an insult to the international community, as fit for the job as a pedophile janitor in a grade school.
Pentagon officials said that Russia has developed a very powerful weapon, which Western specialists have already dubbed as the "doomsday weapon"