UK inflation climbs to 4%

The UK inflation rate rose to 4% in January, which is double the government's target and up from 3.7% the previous month.

This hike puts further pressure on the MPC to raise interest rates, although they were kept on hold at 0.5% last week. Last month, consumer price inflation (CPI) reached its highest level since November 2008, largely as a result of the VAT jump from 17.5% to 20%, while oil, commodity and food prices also had an impact. Meanwhile, inflation measured by the retail price index reached 5.1% last month, up from 4.8% in December. On the news, the pound fell as much as 0.2% against the dollar and the euro, and traded at $1.6058 and 84.25p per euro as of 9:32 a.m. Meanwhile, the yield on t...