Consumer price inflation, UK: August 2018 – U.K. inflation unexpectedly accelerated in August, boosted by the cost of theater shows, computer games, transport fares and clothing.
The jump to 2.7 percent from 2.5 percent may raise questions about how quickly inflation will return to the Bank of England’s target. The central bank increased interest rates last month to tame emerging price pressures, and some economists were expecting inflation to slow to the 2 percent goal by year end, earlier than officials forecast in August.
The pound jumped after the data, reaching the highest in two months. It was up 0.4 percent to $1.3206 as of 9:46 a.m. London time. Bets on another BOE rate hike by mid-2019 rose.