MPC more split than usual over inflation risks: King

Inflation is likely to remain high throughout 2011 but the Monetary Policy Committee (MPC) is more divided than usual over the reasons why, the Bank of England Governor says.

In his now regular letter to Chancellor George Osborne to explain why inflation remains above the 2% target, Mervyn King said the consumer price index (CPI) will remain at a higher level than expected three months ago, for a period of a year or more. Annual CPI rose in October to a four-month high of 3.2%, up from 3.1% in September and higher than economists' forecasts. King blamed the upcoming January hike in VAT to 20% and increases in commodity and other world export prices, which he said have added to companies' costs and so to near-term inflationary pressure. But he revealed t...