by David Milliken and William Schomberg

LONDON (Reuters) – The annual rate of inflation in the United Kingdom remained unchanged in May at 8.7% year on year, which is expected to put pressure on the Bank of England which meets on Thursday, data releases show Wednesday by the National Statistics Office (ONS).

Economists polled by Reuters on average expected consumer prices (CPI) to decelerate to 8.4%, following an 8.7% advance in April.

Excluding energy and food, the rise in consumer prices stands at 7.1%, which marks an acceleration after the increase of 6.8% a month earlier. The Reuters consensus was 6.8%.

According to Grant Fitzner, an economist at the ONS, inflation has been driven by the cost of plane tickets, rising prices for used cars, live music events and computer games.

The inflation statistics, published on the eve of the Bank of England’s monetary policy decisions, should increase pressure Thursday on the issuing institution for a 13th consecutive increase in its interest rates.

The BoE’s main key rate should thus rise from 4.5% to 4.75%, with the markets now counting with a 100% probability on a rate peak at 6% by December, against a probability of 50% Tuesday.

“May’s CPI figures add further pressure on the Monetary Policy Committee to raise the policy rate significantly over the next few months,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Paul Dales, chief economist for the United Kingdom at Capital Economics, in view of the unexpected inflation figures, the BoE could even raise its rates by half a percentage point on Thursday.

“The problem is that the recent surge in core inflation and the reacceleration in wage growth show that domestic inflationary pressures are still building. This suggests that the Bank of England may have more work to do than the Fed or the ECB,” he said.

This high rate of inflation is also a problem for Prime Minister Rishi Sunak who has pledged to halve the rate of price growth by the end of the year, before the legislative elections scheduled for 2024.

“We will not waver in our resolve to support the Bank of England as it seeks to bring inflation down in our economy, while providing targeted support for the cost of living,” the finance minister said. Jeremy Hunt.

After the publication of new data on inflation, the pound sterling took 0.1% to 1.281 dollar.

(Report David Milliken; Claude Chendjou, edited by Tangi Salaün and Kate Entringer)

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