UK inflation steady at 8.7% against forecasts for modest fall; Bank of England set to raise rates
Official figures show that consumer price inflation across the U.K. is unchanged at 8.7% in the year to May against expectations for a modest decline, a development that is set to see the Bank of England raise the cost of borrowing again
LONDON (AP) — Consumer price inflation across the U.K. was unchanged at 8.7% in the year to May against expectations for a modest decline, official figures showed Wednesday, a development that is set to see the Bank of England raise the cost of borrowing again.
The Office for National Statistics said rising prices for flights, recreational and cultural goods and services, and second-hand cars boosted the inflation rate, while gas prices at the pump provided the biggest downward pressure.
“After last month’s fall, annual inflation was little changed in May and remains at a historically high level," the agency's chief economist Grant Fitzner said.
Financial markets think news of the unchanged rate will mean the Bank of England will increase its benchmark interest rate on Thursday from the current 15-year high of 4.5%.
