Price rises will continue their acceleration over the months to come, according to a new report from the Bank of England.
Inflation will hit five percent before the end of the year, a new Bank of England report has forecast.
According to the analysis, the rate will then drop, to get back under the two percent target in around two years. This is because rising food and fuel prices - crucial factors behind the recent sharp increase of the Consumer Price Index (CPI) inflation benchmark - are predicted by the Bank to drop over the long term.
"Inflation will come down and we will resume a pattern of normal growth," Mervyn King, the Bank's governor, said.
According to the latest CPI reading, inflation stood at 4.4 percent for July. As well as being 2.4 percent above target, the new rate represented a 0.6 percent rise over the previous month.
Recent movements on oil prices have backed up the Bank's prediction of a moderating CPI rate: from an all time high of $147 per barrel of crude, marked earlier this year, oil is currently trading at under $120 per barrel. Even the ongoing conflict in Georgia - through which one of the most important pipelines serving the European market runs - has not caused a rally in the prices.
