UK-Inflation
Rising food prices and fuel costs sent the UK's annual inflation rates surging last month in the sharpest increase in the cost of living in almost six years, according to new official figures released Tuesday.

Data from the Office for National Statistics showed that the government's preferred measure of inflation -- the Consumer Prices Index (CPI) -- was up by three percent in the year to April compared with 2.5 percent in the twelve months to March.

The scale of the increase, which was larger than expected, was largely due to a sharp rise in electricity and gas bills after the six leading suppliers raised prices, while food costs were up by 6.6 percent in the year to April.

The rise, coupled with an increase from 3.8 percent to 4.2 percent in the broader Retail Prices Index, which includes housing, was seen as dashing hopes of an early cut in Britain's 5.25 percent interest rates.

The CPI figure is well above the two percent target set by the government, and increases the chances that Mervyn King, the Bank's governor, will be forced to write to explain the accelerating rate of inflation over the rate goes above three percent.

The rising inflation comes in the background of declining house prices and a global credit squeeze prices that have provoked fears that the country's economy is heading for recession.

Consumers and companies have already questioned the validity of the government's index figures, suggesting that the real inflation rate is much higher after feeling the effect of higher costs.