LONDON BRIEFING:The main weapon in Britain against inflation - interest rate rises - has become a blunt one, writes Fiona Walsh.

THE ANCIENT art of letter-writing may be on the wane, but Mervyn King, governor of the Bank of England, will be doing his bit to spark a revival in the months ahead.

His open letter yesterday to chancellor Alistair Darling, explaining why inflation has overshot its target by such a wide margin, is only the first in a series of missives he will be forced to pen in the months ahead as prices spiral further out of control.

By the autumn, the Consumer Price Index, Britain's standard measure of inflation, is forecast to top 4 per cent - more than double the government's 2 per cent target.

For as long as inflation remains more than a percentage point adrift of its target, the governor will be required to publish an explanatory letter to the chancellor once a quarter.

This ritual humiliation of Britain's central bank boss is one of the City of London's quainter traditions and there was some sympathy in the Square Mile yesterday for King. On the day the Daily Mirror newspaper splashed its front page with a story about fuel prices of £1.99 a litre (branding the Exeter garage charging the extortionate amount "Britain's greediest petrol station"), it doesn't take an economist to work out why inflation is soaring.

Fuel and food were the key drivers taking the rate up from April's 3 per cent to 3.3 per cent in May - and neither is under the Bank of England's control.

The figure, the highest for 16 years, was ahead of economists' forecasts of 3.1 per cent.

After being "named and shamed" by the tabloid paper yesterday, the west country garage owner swiftly dropped his prices back to the average £1.18 a litre charged by most garages. If only it were so easy for King to get inflation back on track.

His main weapon against inflation - interest rate rises - is a blunt one, and Threadneedle Street has already lopped a quarter point off base rates three times since last December.

While just a couple of months ago further rate reductions looked a near certainty by the end of the year, yesterday's awful inflation data would appear to point in the opposite direction - to a rate rise.

However, with the housing market in decline, and homeowners struggling to repay debts, the risk of a rate hike to the already-faltering economy is simply too great. Hence the "balancing act" King referred to in his letter.

Raise rates, and run the risk of the economy tumbling into recession; reduce them, and the inflation risk multiplies. Thus the most likely course of action is no action at all, at least for this year.

This may not feel like good news for Britain's mortgage borrowers, who are clamouring for lower loan deals and have largely failed to benefit from the recent rate reductions. Even as Darling was writing his response to the governor, one of Britain's leading building societies was raising its rates.

The Nationwide, Britain's second biggest lender, pushed up the cost of its mortgages by half a percentage point, citing the difficulty in raising funds in the money markets.

Prime minister Gordon Brown moved yesterday to head off spiralling wage claims on the back of the inflation data, revealing that he and his ministers will go without their pay rises this year to "set an example" for public pay restraint.

As voters struggle to fill their cars, pay their utility bills and service their mortgages, they will find the prime minister's example extremely hard to follow - even if they were minded to.

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Clouds have silver linings and struggling menswear retailer Moss Bros has managed to find one in the spectre of recession: surging sales of ties.

Chief executive Philip Mountford says tie sales have been growing at their fastest rate for five years despite the general gloom in the High Street.

He attributes the increase to a fear of redundancy among employees, who are smartening themselves up in an attempt to avoid the chop.

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Fiona Walsh writes for the Guardian newspaper in London