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.

“The Bank of England is losing the battle when it comes to influencing British inflation expectations,” says Ben Traynor in The Daily Reckoning. “And these expectations matter.”