UK inflation updates
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Inflation in the UK in August jumped faster in one month than at any time since the Bank of England gained independence to set interest rates, rising 1.2 percentage points to 3.2 per cent, its highest level since 2012.
The unexpected surge will undermine the central bank’s view that price rises are manageable and temporary, with more likely this autumn in a serious squeeze on living standards.
With CPI inflation more than 1 percentage point above the BoE’s 2 per cent target, Andrew Bailey, its governor, will be forced to write a letter to the chancellor explaining why prices have risen so quickly and what the central bank intends to do to bring inflation back to target.
The annual rate rose from 2 per cent in July to 3.2 per cent in August. Some of the increase reflected coronavirus schemes last summer, such as eat out to help out, which lowered prices temporarily.
But UK prices have increased 2.7 per cent in the past six months alone, highlighting that most of…
