UK inflation has risen to 3.3 per cent, far above the government’s target for the Bank of England of two per cent.

Official figures show the consumer prices index (CPI) rose 0.3 points between April and May.

With inflation now over three per cent, the governor of the Bank of England, Mervyn King, will be forced to write a letter to the chancellor of the exchequer explaining why the target has been missed and what the monetary policy committee (MPC) will do to bring down rising prices.

However, Mr King is now resigned to writing further letters as CPI is expected to rise further to as much as four per cent – as high oil and food prices continue to hit the economy.

Despite the high inflation – usually combated by increasing interest rates – the Bank is under pressure to lower the costs of inflation amid a slowing economy and the credit crunch.

Research by mySupermarket.co.uk reveals a basket of 24 foods has risen 21 per cent in price over the last 12 months.

However, price rises would have been even higher, as data from the British Retail Consortium (BRC) shows supermarkets are now shielding consumers from the full impact of food price rises in a bid to retain market share.

The rising cost of living – with energy, fuel and food prices all increasing – is now pushing many households’ budgets to the edge.

A poll by credit reference agency Callcredit reveals that 46 per cent of Brits say that simply being able to afford to live – making ends meet and servicing current debt levels – is their primary financial challenge over the coming 12 months.