British inflation jumps to 16-year high as oil, food prices bite

---

LONDON, June 18 (AFP): British inflation hit a 16-year high of 3.3 per cent in May, driven by soaring food and energy costs prices, figures showed yesterday, complicating central bank efforts to keep a slowing economy on track.

Analysts said the outcome extinguished hopes of an interest rate cut by the Bank of England (BoE) for the foreseeable future as fears about rising prices outweigh concerns over an economic slowdown and a flagging housing market.

They said it was possible that the central bank might even hike interest rates to head off inflation risks despite calls for an easing to take the pressure off the housing market and broader economy.

The 12-month inflation reading was the highest level since July 1992 and a sharp increase from 3.0 per cent in April, the Office of National Statistics (ONS) said.

The outcome was above the official central target rate of 2.0 per cent for the seventh month in a row and compared with analyst forecasts for 3.2 per cent.

Britain's latest inflation data "is yet more disappointing and worrying news," said Howard Archer, an economist at the Global Insight consultancy in London.

"The one thing that can be said with a fair degree of confidence at the moment is that interest rates will not be coming down further any time soon and that if the BoE does act in the near term, it will be to raise interest rates," Archer added.