UK inflation rise highest since 1997

UK inflation quickened to the fastest pace in at least 11 years in September, squeezing consumers with higher living costs as the financial market crisis curbed the availability of credit.

Prices rose 5.2 percent from a year earlier, the most since records began in 1997, the Office for National Statistics said in London yesterday. The median forecast of 32 economists in a Bloomberg News survey was 5 percent. Inflation has now exceeded the Bank of England's 2 percent target for a year.

The central bank cut the benchmark interest rate last week by half a point to 4.5 percent after an emergency meeting. The crisis of confidence in the banking system and lower commodity prices have raised the risk that inflation may slow below the target, policymaker Andrew Sentance said on Monday.