The economy needs a period of sustained weakness to squeeze out remaining inflationary pressures, Mervyn King, the governor of the Bank of England, said on Tuesday in a letter to Alistair Darling, the chancellor.

Consumer price inflation rose to 4.7 per cent in August, the Office for National Statistics reported on Tuesday, up from 4.4 per cent in July and at the higher end of expectations, on the back of sharp rises in gas and electricity bills. Inflation in the retail price index - the basis for some wage and benefits adjustments - fell to 4.8 per cent year on year from 5 per cent, reflecting house price falls.