Rising food and fuel prices, aligned with stunted retail sales over recent weeks, have helped push the level of UK inflation to a 16-year high, new figures show.

Data released from the Bank of England show that the rate of inflation currently stands at 4.4%, despite its most recent quarterly forecast putting the odds of it reaching such a level as one in 10.

This represents the highest level since April 1992, when John Major's government was steering the economy out of the recession seen at the start of that decade, with many economists now predicting that inflation could hit five percent before the end of the year as price rises are not just limited to food and petrol.

While wholesale oil and grain prices are expected to decline over the next few months, this downturn will take a while to filter into consumer price inflation and, according to Vince Cable, any real recovery is still a long way off.

The Liberal Democrat Treasury spokesman told the Financial Times: "It's very clear that we're in for a dose of stagflation, with the economy slowing abruptly and inflation too high and increasing."