Inflation has hit a 16-year high, as rising utility bills and higher food prices take their toll on the consumer. The Consumer Prices Index hit 4.7% in August - up from the previous month's rate of 4.4% The last time the cost of living was climbing at such a steep rate was in a recession in March 1992. The high figure has dashed hopes that the Bank of England might be able to cut interest rates next month. Food prices increased largely thanks to a 17.4% rise in the cost of bread and cereals while meat prices rose 17.1% compared to last year. Retail gas and electricity prices increased by 25% on last year.