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| Inflation climbs to 3.8% in June | Inflation climbs to 3.8% in June |
| (10 minutes later) | |
| The UK inflation rate was 3.8% in June, pushed higher by rising food and fuel costs, official figures have shown. | The UK inflation rate was 3.8% in June, pushed higher by rising food and fuel costs, official figures have shown. |
| That compared with a 3.3% figure in May, the Office for National Statistics said. The RPI inflation rate was 4.6%. | That compared with a 3.3% figure in May, the Office for National Statistics said. The RPI inflation rate was 4.6%. |
| The Bank of England has already said it expects price growth to continue this year, and may top 4% before December. | The Bank of England has already said it expects price growth to continue this year, and may top 4% before December. |
| The worry for analysts is that interest rates may have to rise to cool inflation at a time when growth is slowing and consumer demand is waning. | |
| The figures, which came in above forecasts for the third month in a row, mean the Bank of England will now have less breathing space to cut interest rates. | |
| The Bank is currently trying to balance growing evidence of an economic slowdown against the problem of rising inflation. | |
| "The Bank of England can't cut rates until it is convinced inflation is moving downwards," said James Knightley, economist at ING. | |
| Food and non-alcoholic drinks were the main factors fuelling the rise, with prices increasing by a record 2.1%, the ONS said. | |
| Meanwhile, surging oil prices have driven up the cost of fuel with the average price of petrol increasing by 5.3p a litre. |