King Says Inflation Driven By Commodity Prices, to Rise Further

Bank of England Governor Mervyn King said the recent surge in inflation is being driven by higher sales tax and increases in energy and import prices.

``Although the impact on inflation of these factors is difficult to quantity with precision, it is likely that had they not occurred inflation would have been substantially lower and probably below the target,” King said in a letter to Chancellor of the Exchequer George Osborne. Inflation is likely to rise further over the next few months, he said.