A employee arranges produce inside a Sainsbury’s supermarket in Richmond, west London, Britain, June 27, 2022. Picture taken June 27, 2022. REUTERS/Henry Nicholls
LONDON – British annual consumer price inflation (CPI) unexpectedly fell to 6.7 percent in August, according to official data revealed on Wednesday. This comes just a day before the Bank of England is expected to raise rates once again.
Economists surveyed by Reuters had predicted that the CPI would increase to 7 percent from July’s 6.8 percent due to rising fuel prices and an alcoholic drink tax. However, these factors only led to a slight uptick in the annual inflation rate, which is the first increase since February.
In its previous statements, the BoE estimated that inflation in August would reach 7.1 percent, followed by a sharp decline to around 5 percent in October. Nevertheless, even at 5 percent, inflation will still be more than double the bank’s 2 percent target.
READ: UK inflation to be highest among big economies in 2023 – OECD
The Bank of England is widely anticipated to raise interest rates for the 15th consecutive time on Thursday, pushing Bank Rate from 5.25 percent to 5.5 percent. However, many economists and investors believe that this could be the final hike in the bank’s tightening cycle as the British economy slows down.
READ: Bank of England raises borrowing costs to 15-year peak, signals rates to stay high
Core inflation, which excludes food and energy prices, dropped to 6.2 percent in August from 6.9 percent in July. The Reuters survey had projected a reading of 6.8 percent for August.
The release of this data by the Office for National Statistics caused a significant decline in the value of the British pound against the U.S. dollar and the euro.
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
