UK inflation heat puts Bank of England back in the spotlight

British inflation looks set to hit 4% next month, double the Bank of England's target and a level likely to add to nervousness at the central bank about the risk of price growth getting stuck at a stubbornly high rate. Consumer prices climbed by 3.8% in July, data showed on Wednesday, the fastest annual rise for a Group of Seven economy and approaching the BoE’s forecast of a 4% peak in September.

- 

While below the four-decade high of 11.1% reached in October 2022, when energy prices were surging after Russia's invasion of Ukraine, July’s reading was the strongest in 18 months. By comparison, U.S. inflation held at 2.7% in July and in the euro zone it is expected to stay around 2%. British inflation has been above the BoE’s 2% target almost constantly since May 2021, reported Reuters.

Little wonder then that the central bank — which saw its standing fall in the eyes of the public when inflation jumped in 2022 I has suggested that its already gradual run of interest rate reductions might slow, even with the jobs market weakening. It was reported by Reuters.