Rising gas and food prices last month pushed British inflation to its highest rate in 40 years, according to official figures that heightened the odds of a rare 0.5 percentage point interest rate hike by the Bank. from England next month.
The National Bureau of Statistics said annual consumer price inflation rose in June to 9.4%, the highest since February 1982, from 9.1% in May and above expectations of 9.3% in a Reuters poll. with economists.
The reading means the UK has had the highest inflation rate seen in any advanced G7 economy since 1985, although many smaller European Union countries are currently seeing even faster growth in prices.
Wednesday’s data reinforced bets that the British central bank will opt for a 0.50 percentage point increase next month, which would be the biggest since 1995. The European Central Bank is considering such a move this week, sources told Reuters on Tuesday (19).
The Bank of England has raised interest rates five times since December as it tries to prevent rising inflation from becoming entrenched in the British economy, it is expected to raise a new rate on August 4th.
Investors now see an almost 100% chance that the British central bank will raise the rate to 1.75% from 1.25% next month. The bank said in June that it was ready to act “forcefully” if necessary.
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