UK inflation picks up more than expected to 3.5% in September
TLT•Britain’s annual consumer price inflation rose to 3.5% in September from 3.1% in August, above economists’ 3.4% median forecast. Investors expect the Bank of England to raise its benchmark rate to 4% next month.
1. Inflation exceeds forecasts
Britain’s annual consumer price inflation rose to 3.5% in September from 3.1% in August. Economists had expected inflation to reach 3.4%, while the Bank of England forecast a smaller increase to 3.0% in July.
2. Rate hike expectations grow
The central bank has said the energy price shock has had a limited impact on broader inflation so far, but Governor Andrew Bailey and other policymakers have said the likelihood of a rate hike is growing the longer energy prices stay elevated. Investors expect the Bank of England to raise its benchmark Bank Rate to 4% next month, its first increase in three years.
3. Energy and household support
The article said Britain has been more affected than most Western countries by the Gulf war because of its reliance on imported natural gas. Finance minister John Healey is expected to offer further support for households hit hardest by rising energy prices in his first budget next week.
