Published: Wed, September 13, 2017
Money | By Oscar Reynolds

British inflation jumps, pushing pound to one-year dollar high

British inflation jumps, pushing pound to one-year dollar high

Daily consumables like fruits and vegetables turned costlier during the month with inflation print coming at 5.29 per cent and 6.16 per cent, respectively as against 2.83 per cent and (-) 3.57 per cent in July, according to the data released by the Central Statistics Office (CSO).

But a rebound in the price of oil also had an impact, pushing up fuel prices.

The fall in the value of sterling since the European Union referendum continued to be the main impetus for rising prices, the Office for National Statistics said. That suggests traders are more confident of a rate hike, soon.

Consumer prices climbed 2.9 percent year-over-year in August, faster than the 2.6 percent rise in July.

Inflation rose in both Britain and the EU overall, with increasing global commodity prices thought to be partly responsible, although the United Kingdom rate is higher than in all the larger western European nations.

Today's numbers are up from the 2.6% level of inflation, which was recorded in the previous figures for both July and June.

"Indeed it's possible that 2.9 per cent will be the highest we see in the current cycle".

"I see more deflationary forces than inflationary in the world economy at present".

He went on to say that this is likely to mean the Bank of England will keep interest rates on hold at a meeting later this week, allowing them to "remove the sticking plaster of ultra-low interest rates as slowly as they like".

The jump was large led by a sharp rise in clothing prices in August, with inflation for clothing and footwear reaching 4.6 per cent, its highest levels since the Thatcher era.

"Over the long term, inflation is rarely a country-specific phenomenon, especially for developed, open, market economies".

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