Ruth Mitchell

Utility bills could push inflation to 5%

The governor of the Bank of England, Mervyn King, has reportedly warned that higher utility bills could push inflation to 5% later this year.

Publishing the bank’s latest Inflation Report, he said there remained strong downward pressures on economic growth and upward pressures on inflation.

However, he said that the “big picture” had not changed much since the last report in February.

The Bank still expects inflation to fall back in 2012 and 2013.

Several analysts have reportedly said they expect domestic fuel bills to rise this winter.

On Monday Centrica, which owns British Gas, said domestic prices did not reflect what the company pays on the wholesale market.

Mr King said there was “a great deal of uncertainty about the outlook for inflation”.

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