UK inflation rate remains at 3.1%

Rises in the price of bread, cereals and vegetables helped to keep the inflation rate high

UK Consumer Prices Index (CPI) inflation remained unchanged in August at 3.1%, according to the Office for National Statistics (ONS).

It means the rate remains well above the Bank of England's 2% target, and it brings to an end a three-month period during which the rate had been falling.

The unexpectedly high rate was boosted by strong rises in air fares, clothing and food. Fuel prices fell.

Retail Prices Index (RPI) inflation slowed to 4.7%, down from 4.8% in July.

CPI is used for the Bank of England's target. However, RPI - which includes more housing costs - is important for wage negotiations, and is used to calculate certain benefit increases and mortgage payments.

Economists had forecast lower rates of inflation for August, with CPI expected at 2.9% and RPI at 4.6%.

The news could strengthen the position of Andrew Sentance, the member of the Bank's Monetary Policy Committee who broke ranks over the summer to vote in favour of an interest rate increase.

The pound jumped 0.6% against the dollar on the news, to $1.544, as markets priced in the probability that UK interest rates may rise sooner than previously expected.

Food prices:

Air fares, which tend to rise during the summer holiday months, jumped 16% in August - their sharpest rise for the month on record.

Clothing and footwear prices rose at their fastest monthly rate for an August since 2001, although prices remain below their level of a year ago.

The news follows a warning from department store Debenhams, who said on Tuesday that the entire UK clothes retail industry faced higher prices, thanks to the rising cost of cotton and the weak pound.

The warning was echoed comments by retailer Primark on Monday that rising costs may eat into its profit margins over the coming year.

Summer sales discounts happened earlier in the year than usual, meaning that discounting had a relatively smaller impact on the August data than usual.

Food costs continued to rise, with bread, cereals and vegetables leading the way.

Wheat prices hit a 22-month high in August after rising more than 50% since the end of June.

Target missed

More worryingly for economists, the core inflation rate rose to 2.8%, from 2.6% in July.

Core inflation strips out volatile food and energy prices, and is used to gauge the underlying longer-term inflation trend.

The CPI inflation rate has now remained above the Bank of England's target for nine months.

Mervyn King, the Bank's governor, is likely to be disappointed that the rate has remained outside the government's 1%-3% tolerance range for another month.

Last month, he had to write a letter to the chancellor of the exchequer explaining why the rate was still more than one percentage point above its 2% target.

He blamed temporary factors, including the return of VAT in January to 17.5%, past rises in oil prices and higher import prices as a result of the depreciation in the pound since the middle of 2007.

However, he said "there remains a significant probability that I will need to write further open letters to you in the coming months".

VAT is set to rise again, to 20%, in January next year, giving a further boost to headline inflation figures.

Eroding savings:

The continuing high rate of inflation will be bad news for savers.

With interest rates at record lows, the real value of savings is being steadily weakened.

"Inflation is a stealthy enemy that quietly erodes the spending power of a saver's hard-earned nest egg," said Darren Cook of the financial information service Moneyfacts.

He points out that a basic rate taxpayer needs to find an account paying 3.88%, while a higher rate tax payer needs to find an account offering 5.17%, in order to maintain the real value of their savings.

"The average instant access savings rate is still at rock bottom at a rate of only 0.77%," said Mr Cook.

"Only 91 out of a possible 1,020 accounts allow a basic rate tax payer to just break even at 3.88%."

The average savings pot of a basic rate tax payer is in effect being eroded by 2.48% per year.

Source: BBC News.

Rafael Nadal plays down comparisons with Roger Federer

Archive - Nadal wins first Grand Slam at 2005 French Open

Rafael Nadal was quick to play down talk of him overtaking Roger Federer's record haul of 16 Grand Slams after winning his first US Open title.

The Spaniard, 24, beat Novak Djokovic 6-4 5-7 6-4 6-2 in New York to earn his ninth Grand Slam crown and complete his set of winning all four major titles.

Asked about Federer's tally of 16 Slams, he said: "It's very far. For me, it's too far to think about that.

"I think talk about if I am better or worse than Roger is stupid."

Nadal joins Federer, Andre Agassi, Roy Emerson, Rod Laver, Don Budge and Fred Perry in having won all four Grand Slams and also becomes the first man since Laver swept the board in 1969 to win the French Open, Wimbledon and US Open in the same year.

And at five years younger than Federer, the Majorcan has time on his side in the pursuit of more major victories.

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Nadal is the best - Djokovic

"The titles say he's much better than me, so that's true at the moment," stated Nadal. "I think it will be true all my life."

"For me, always Roger was an example, especially because he improved his tennis I think during all his career, and that's a good thing that you can copy, no?"

"So I try to copy this and I know Roger and me are different, much different styles. Being better than Roger - I don't think it's the right moment to talk about that because I don't think that."

Nadal has now won five French Opens, two Wimbledon, one Australian and one US Open, as well as an Olympic gold medal and the Davis Cup.

And he admitted that the one significant title for him still to win is the end-of-year ATP World Tour Finals, played indoors at London's O2 Arena in November.

MEN'S CAREER GRAND SLAMS Fred Perry (GB) 1933-1935 Don Budge (US) 1937-1938 Rod Laver (Aus) 1960-1962 Roy Emerson (Aus) 1961-1964 Andre Agassi (US) 1992-1999 Roger Federer (Swiss) 2003-2009 Rafael Nadal (Spain) 2005-2010

"My goal remains the Tour Finals, it's probably the last big tournament that I didn't win," added Nadal.

"That's true it's the most difficult title for me to win because we play it indoors on a very quick surface, so it's always going to be very difficult if we don't change that."

"But at the same time it's a challenge for me to keep improving to have the chance to play well there and to have the chance to win. So that's what I'm going to try this year."

Djokovic, also the US Open runner-up in 2007, said of Nadal: "He's so mentally strong and dedicated to this sport. He has all the capabilities, everything he needs, in order to be the biggest ever.

"He has the game now for each surface and he has won each major. He has proven to the world that he's the best in this moment, so there is no question about it."

The Serb put on a brave face in the immediate aftermath of his defeat but later conceded: "I cannot hide the disappointment. I'm not going to cry or complain about that. It's just the way it is.

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Federer's record better than mine - Nadal

"Of course I'm feeling bad about my loss. I wanted that trophy and I know I gave my maximum to get it but tomorrow I will wake up as a new man. I will continue on working hard and waiting for the next chance to come."

The 23-year-old said that Nadal was simply too strong in the closing stages as he became the first left-hander to win the US Open since John McEnroe in 1984 and the first Spaniard since Manuel Orantes in 1975.

"I don't think I played a bad match overall," commented Djokovic. "It was very good performance from my side but whenever it was important, he was the one who was playing just too good."

Djokovic, the 2008 Australian Open champion, will move up to number two in the new world rankings, ahead of Roger Federer after defeating the Swiss in a dramatic five-set semi-final.

"I've played the best tennis, certainly in the last seven, eight months, maybe the whole year," he said.

"From Wimbledon up to this point, I feel much more comfortable on the court, more confident and getting this aggressive game back and the game that I need to have in order to stay at the top, a game that has been part of me always.

"It's a good sign. I will continue on working, as I said, and hope that I can keep that performance."

And Djokovic will get the chance to shake off his disappointment this coming weekend as he returns to Serbia for the Davis Cup semi-final against the Czech Republic.

"Davis Cup is very important," he added. "It's one of the crucial matches, semi-finals for the first time, and there is a lot of interest for the match in our country.

"I don't think it's going to affect me too much. I'm physically fit."

Rafael Nadal wins 2010 Wimbledon title

Source: BBC Sports

American hiker released from Iranian prison, lawyer says

By the CNN Wire Staff

September 14, 2010 -- Updated 1336 GMT

Tehran, Iran (CNN) -- Sarah Shourd, one of three American hikers detained for more than a year in Iran, has been released from prison, her lawyer told CNN on Tuesday.

Attorney Massoud Shafii, who is representing the hikers, had said everything was in place for Shourd's release once bail of $500,000 was submitted to the Iranian judiciary.

Tehran Prosecutor General Abbas Jafari Dolatabadi told state-run television that "representatives" of Shourd paid her bail to an Iranian bank in Muscat, Oman, after which a judge ordered her release Tuesday.

"She can leave Iran if she wants to," Dolatabadi said.

A diplomat at the Swiss embassy told Press TV that Shourd would be leaving Iran later Tuesday.

Shourd, 32; Shane Bauer, 28; and Josh Fattal, 28, were detained July 31, 2009, after they allegedly strayed across an unmarked border into Iran while hiking in Iraq's Kurdistan region.

Tehran has accused the three hikers of spying.

As the news of Shourd's release unfolded, a spokeswoman for the families of the hikers, Samantha Topping, said the families had heard nothing officially.

"We don't have any confirmation of Sarah's release. The families are watching news reports," she said.

A judge decided to allow Shourd to be released on bail because of her medical condition, the official Islamic Republic News Agency reported Sunday, citing Tehran Prosecutor General Dolatabadi.

Shourd had a pre-existing gynecological problem, and her family says she now also has a lump in her breast, according to Shafii.

Iranian officials have apparently changed their stance on Shourd's release several times since last week.

Iranian officials had announced Thursday that Shourd would be released on Saturday, at the end of the Islamic holy month of Ramadan. But state media announced Friday that the release had been called off because legal procedures had not yet been resolved.

On Sunday, Dolatabadi announced the country's "readiness for the conditional release of one of the three U.S. citizens arrested for illegally entering the country," state-run Press TV said.

"It's hard to say what's behind the twists and turns of this," U.S. State Department spokesman P.J. Crowley told reporters Monday. "Our focus is on getting the hikers home, as it has been for more than a year."

Gary Sick, a professor at Columbia University and a former National Security Council Iran analyst, said it was not a coincidence that the latest news came just as Iranian President Mahmoud Ahmadinejad is about to attend the United Nations General Assembly meeting later this month.

"I think President Ahmadinejad really wanted to use this as a way of building up a store of goodwill just before he comes to New York," Sick said. "It didn't work that way, and I think that his plans were really screwed up by that fact that all of these hard-liners in Iran, the conservatives that are supposed to be his friends, are all attacking him left and right."

Dolatabadi said Sunday that authorities had completed investigations on espionage charges against the three Americans over the past several days and the indictments have already been issued by the judge in charge of the case, IRNA reported.

But Crowley said Monday that the United States remains firm in its belief that the hikers are innocent.

"We do not believe that they are guilty of any crime. Iran has had more than enough time to investigate and satisfy its questions about why these three individuals crossed an unmarked border," he said. "We want to see this resolved. We are grateful to the Swiss and other countries that are working these issues on our behalf."

The Swiss have been representing American interests in the case in the absence of formal U.S.-Iran diplomatic relations.

The hikers' families' website, freethehikers.org, said Shourd had been in solitary confinement and had been able to meet for only two 30-minute periods per day with Bauer, who is her fiancé, and Fattal. The two men share a cell.

The site also includes an August 10 letter -- signed by the mothers of all three hikers -- urging Iranian officials to release them.

"Shane, Sarah and Josh are spending their second Ramadan in detention. Today is also Sarah's birthday -- her second in solitary confinement. Sarah has a serious medical condition and we are gravely concerned for her physical and emotional welfare, for which Iran's leaders are responsible," the letter says. "We urgently call on the Iranian authorities to end her isolation and provide her with adequate care."

On Monday, Shafii had said he was waiting for the Swiss Embassy to deposit the bail money, the semi-official Iran Students' News Agency reported.

"During my meeting with the client's family, we agreed to take measures for her release as soon as the money is provided," he said, according to the agency.

CNN's Mary Snow, Reza Sayah and Catherine E. Shoichet contributed to this report.