British inflation reached its highest rate since the Labour government handed over monetary policy responsibilities to the Bank of England (BoE) in 1997, reports Bloomberg.

At 3.3%, inflation is way above target (2%), and BoE Governor Mervyn King has conceded that it could breach 4% later this year.

How will we know the credit crisis and banking fiasco are truly over? We won’t. But there’s a damn good indicator that will show us the way - the London Interbank Offer Rate, usually referred to as LIBOR. And right now LIBOR tells us that this financial mess still has room to run.

A £50 billion rescue package for banks hit by the credit crunch was unveiled by the Bank of England today.