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UK Inflation Surprises

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• September 19, 2018
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UK inflation jumped unexpectedly to a six-month high in August, pushed up by bigger-than-usual seasonal increases in sea and air fares and higher theatre admission prices, official data showed this morning.

CPI rose at an annual rate of 2.7 percent in August, compared with 2.5 percent in July, the Office for National Statistics said, above all forecasts, economists had pointed to a fall to 2.4 percent.

The ONS also said British house prices rose at the weakest annual rate in nearly five years, dragged down by the biggest drop in London house prices since 2009.

This Morning’s figures are likely to surprise Bank of England officials who last month raised interest rates for the second time since the financial crisis and signalled only a gradual rise in borrowing costs in the coming years.

Last week the BoE said it expected inflation to cool to 2.4 percent in August.

The BoE expects inflation will drift down to just above its 2 percent target in two years’ time as it gradually raises borrowing costs.