Inflation even worse than headline figure suggests - Cable

12.00.00am BST (GMT +0100) Tue 17th Apr 2007

Commenting on the announcement that the CPI measurement of inflation has hit 3.1%, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "This news gives lie to the claim that the Government has permanently achieved a nirvana of steady growth without inflation.

"The situation is actually a good deal worse than the headline figure suggests, since the CPI fails to incorporate the rampant inflation in the housing market.

"This high inflation is likely to cause further interest rate rises which will cause misery for thousands of people in severe debt who have borrowed up to the hilt to secure a mortgage.

"We have seen rapidly growing house repossessions and insolvencies, as inflation and interest rates rise. Debt servicing problems will only get worse.

"It will be interesting to read the Governor's letter to Gordon Brown, to see how many causes of this inflation actually lie at the door of number 11."