King acknowledges risk of wage-price spiral as inflation climbs to double Bank’s target

Bank of England governor Mervyn King has conceded mounting wage and price pressures may have a significant impact on the medium-term outlook, but maintained the inflationary pressures were temporary and inflation would eventually fall back to target.

In a letter to George Osborne, the UK's chancellor of the exchequer, which was sent on Monday but released on Tuesday, King placed greater weight on the risks to inflation compared with his letter to the chancellor in November and acknowledged that

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