MercoPress. South Atlantic News Agency

UK's June inflation highest in nine months

June United Kingdom inflation rose to its highest rate in nine months, resurrecting concerns about a Bank of England interest rate rise.

Rising gas and electricity bills have pushed UK inflation to its highest level since September 2005 reported the Office for National Statistics (ONS) with the Consumer Price Index reaching 2.5% from 2.2% in May, well above the government's 2% target.

The headline rate of RPI inflation, which includes mortgage interest payments, rose from 3% to 3.3%. The latest inflation figure matches the highest level since the CPI measure was introduced in 1997.

While higher fuel bills are causing inflation worries, policymakers are also concerned that bigger bills are cutting disposable income and may cause consumers to tighten their purse strings

The rise is believed could put pressure on the Bank of England to raise interest rates to keep inflation under control. Both the Bank of England and the European Central Bank held their interest rates in their latest review on July 6. The Bank of England left interest rates at 4.5% for the 11th consecutive month.

The European Central Bank kept its key rate at 2.75%, but signalled it may tighten again in early August to hold inflationary pressures in check.