British 12-month inflation soars to 4.0% in January

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British annual inflation soared to 4.0 percent in January, the highest level for more than two years and compared with a rate of 3.7 percent in December, official data showed on Tuesday.

The January level was lower than analysts' consensus forecast for a year-on-year rise to 4.2 percent, according to a survey by Dow Jones Newswires.

However at 4.0 percent -- the highest level since November 2008 -- it was double the Bank of England's target rate of 2.0 percent, following a hike in the British VAT sales tax and higher oil costs.

The Office for National Statistics added that Consumer Price Index (CPI) inflation rose by 0.1 percent in January from December on a month-on-month basis. Analysts had predicted a rise of 0.3 percent.

"Two of the main factors that had an impact on the January data are the increase in the standard rate of Value Added Tax (VAT) to 20 percent and the continued increase in the price of crude oil," the ONS said in its statement.

© 2011 AFP

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