Mervyn King, Governor of the Bank of England, today admitted that his letter to the Chancellor Alistair Darling explaining soaring inflation is likely to be the first of many as the Consumer Price Index (CPI) is forecast to reach above 4 per cent this year.

Mr King gave his forecast as inflation soared to a 16-year high of 3.3 per cent during May, raising the prospect that the Bank will be forced to raise the interest rate to stem spiralling prices.

Analysts had expected CPI, the official measure of inflation, to rise from 3 per cent to 3.1 per cent in May. The Bank's target rate of inflation is 2 per cent.

However, the larger-than-expected rise in inflation, which has been driven by increasing utility and food bills, means that the Bank's Monetary Policy Committee (MPC) may be forced to act quickly and increase the UK interest rate above the current 5 per cent.

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Mr King is required to write a letter of explanation to the Chancellor when inflation rises above 3 per cent.

The Governor said today: “…each monthly rise in food, energy and import prices will, by pushing up the overall price level, affect the official 12-month measure of inflation for a year.

“So CPI inflation is likely to remain markedly above the target until well into 2009. I expect, therefore, that this will be the first of a sequence of open letters over the next year or so.”

Mr King must now write a letter every three months that the rate remains above the 3 per cent threshold.

Mr King also said today that the pain for hard-pressed consumers was likely to worsen. "As things stand, inflation is likely to rise sharply in the second half of the year to above 4 per cent."

Last month, the Bank had estimated that inflation would peak at 3.5 per cent, but Mr King said that surges in oil and gas prices in the last month were likely to result in even higher prices.

Oil scaled new heights yesterday, reaching a record price of $139.89 a barrel, although it fell back by the end of the day to just above $135. The price of crude oil has risen by 40 per cent this year.

While food prices are rising at around 7 per cent annually - the fastest rate since 1990.

Mr King said the MPC remained committed to meeting the 2 per cent inflation target in the next two years. However, analysts say that the gloomy data may force the MPC's hand on rate changes.

Howard Archer, chief UK and European economist at Global Insight, said: "The one thing that can be said with a fair degree of confidence at the moment is that interest rates will not be coming down further any time soon and that if the Bank of England does act in the near term, it will be to raise interest rates."

Worryingly for the Bank, core inflation, which strips out the cost of food and energy, rose to a seven-month high of 1.5 per cent in May, up from 1.4 per cent in April and 1.2 per cent in March.

Analysts say that it will raise concerns that higher energy and food prices are starting to filter through and force the prices of other goods to rise.

The Retail Price Index (RPI), the measure of inflation which includes the cost of housing and council tax, rose to 4.3 per cent, up from 4.2 per cent in April.

But the pressure on consumers' wallets is so intense that most people think that inflation has already risen to 5 per cent, according to figures released last week by the Bank of England.

In his reply to Mr King's letter, the Chancellor said that considering the recent price increases for oil and food, "The rise in inflation has been extremely moderate compared with the behaviour of the economy in the 1970s and 1980s."

Last April, Mr King was forced to write to the then-Chancellor, Gordon Brown, to explain why inflation had risen above 3 per cent for the first time since the Bank's monetary policy framework was set up in 1997.

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