British inflation jumps, pushing pound to 1-yr dollar high

AFP, LONDON: Britain’s annual inflation rate accelerated in August, mainly on rising prices for motor fuels and clothing, official data showed yesterday, sending the pound to a year-high versus the dollar.

The Consumer Prices Index (CPI) 12-month rate jumped to 2.9 per cent in August compared to 2.6 per cent in July, the Office for National Statistics said in a statement.

“Rising prices for clothing and motor fuels were the main contributors to the increase in the rate between July and August,” the ONS said.

The latest data beat expectations of a gain to 2.8 per cent, according to analysts’ consensus forecast.

The higher-than-predicted figure could meanwhile put pressure on the Bank of England to raise its key interest rate from a record-low level sooner than expected, although it is not forecast to make any change at Thursday’s regular policy meeting.

“With the Bank of England meeting this week the hawks may well be emboldened by today’s price growth, but with the pay squeeze entrenching itself more deeply month by month the policy hawks (wanting a rate hike) will find their room for manoeuvre sorely limited,” said Chris Beauchamp, chief market analyst at IG trading group, said following yesterday’s data.

British inflation has risen sharply in recent months as a Brexit-hit pound raises import costs.

However sterling hit a year-high at $1.3282 in the wake of yesterday’s data, as traders bet on the timing of rate tightening from the Bank of England.

British inflation jumps, pushing pound to 1-yr dollar high

AFP, LONDON: Britains annual inflation rate accelerated in August, mainly on rising prices for motor fuels and clothing, official data showed yesterday, sending the pound to a year-high versus the dollar. The Consumer Prices Index (CPI) 12-month rate jumped to 2.9 per cent in August compared to 2.6 per cent in July, the Office for National Statistics said in a statement. Rising prices for clothing and motor fuels were the main contributors to the increase in the rate between July and August, the ONS said. The latest data beat expectations of a gain to 2.8 per cent, according to analysts consensus forecast. The higher-than-predicted figure could meanwhile put pressure on the Bank of England to raise its key interest rate from a record-low level sooner than expected, although it is not forecast to make any change at Thursdays regular policy meeting. With the Bank of England meeting this week the hawks may well be emboldened by todays price growth, but with the pay squeeze entrenching itself more deeply month by month the policy hawks (wanting a rate hike) will find their room for manoeuvre sorely limited, said Chris Beauchamp, chief market analyst at IG trading group, said following yesterdays data. British inflation has risen sharply in recent months as a Brexit-hit pound raises import costs. However sterling hit a year-high at $1.3282 in the wake of yesterdays data, as traders bet on the timing of rate tightening from the Bank of England.