BoE chief to explain UK inflation rise

Bank of England Governor Mervyn King will send a letter of explanation to the Chancellor today when figures show a spike in inflation above 3%.

Economists are forecasting that Consumer Prices Index (CPI) inflation surged to a 14-month high of 3.5% in January, caused by a temporary rise in prices as a return to the 17.5% VAT rate and higher petrol costs took effect.