Surging food prices boost UK inflation

A surge in food prices due to bad weather pushed Britain's underlying inflation rate to its highest level in more than two years…

A surge in food prices due to bad weather pushed Britain's underlying inflation rate to its highest level in more than two years, official data showedtoday.

National Statistics said the core inflation rate, which strips out volatile home loan payments, surged to 2.4 per cent in May from 2 per cent in April.

Economists had expected an unchanged figure and the latest data could spark concerns that the Bank of England may not cut interest rates again.

However, still remains below the Bank's 2.5 per cent target where it has been for more than two years.

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NS said the largest upward effect came from food prices, mainly seasonal, following wet weather and poor growing conditions which have hampered supplies of vegetables. It said there was no noticeable effect from foot-and-mouth disease.

Food prices jumped 2.4 per cent on the month, the biggest monthly rise since January 1982, to stand 5.3 per cent up on a year earlier, the biggest annual rise since September 1995.