Inflation hits monthly record in Britain

London -- Prices in Britain rose 4.4 percent in July, rising above economic forecasts and more than twice the target rate set by the Bank of England, the government said.

Economists had forecast a 4.2-percent inflation rate, while the International Monetary Fund had recently said inflation in Britain could reach 5 percent. The Bank of England has set the target rate at 2 percent.

"The sharp spike up in inflation in July increases the risk that the Bank of England will raise interest rates despite the fact that the economy seems more likely than not to contract over the second half of the year," Howard Archer of Global Insight told The Times of London.

Core inflation, which excludes energy and food prices, rose 1.9 percent on the month, a jump of 0.3 percent from May's core inflation rate.

Analysts said the jump meant retailers were passing along costs to consumers, meaning the effects of rising oil prices was rippling through the economy, The Times reported.

Copyright 2008 by United Press International.