Thursday June 26, 08:40 AM
Bank Of England Chief In The Hot Seat
By Sky News
The fight against inflation will be back in the spotlight when Bank of England Governor Mervyn King appears before MPs. He will be quizzed by the Treasury Select Committee a week after UK inflation hit 3.3%. That is way above the Bank's
2% target and the highest figure since it was made independent 11 years ago.With soaring oil, energy and food costs, Mr King has warned the cost of living could rise higher still above 4%. Despite this he is likely to tell MPs the inflation spike is temporary and things should improve next year. After three interest rate cuts to 5% in April, some experts have voiced fears it may have to go up again to bring down inflation. But in his letter to the Chancellor explaining why inflation was so high Mr King played down the prospect. Outgoing deputy governor Sir John Gieve is also being quizzed by MPs today. He was given a hard time by the committee last year over the Northern Rock crisis. Members accusing him of being "asleep in the back shop" as it was unfolding.
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