UK inflation leaps to 10-year high, bolstering rate hike bets

  • UK CPI hits 4.2% vs forecast 3.9%
  • Highest consumer price inflation since 2011
  • Bank of England to consider rate hike next month
  • Producer price inflation hits highest in 10 years

LONDON, Nov 17 (Reuters) – British inflation surged to a 10-year high last month as household energy bills rocketed, according to data on Wednesday that will bolster expectations that the Bank of England will raise interest rates next month.

Consumer prices rose by 4.2% in annual terms in October, leaping from a 3.1% increase in September. Both the BoE and a Reuters poll of economists – none of whom had predicted such a big increase – had pointed to a reading of 3.9%.

“Today’s inflation data will reinforce the Bank of England’s resolve to act,” Yael  Selfin, chief economist at KPMG UK, said.

The pound climbed to a one-week high versus the U.S. dollar and a 21-month high against the euro after the data.

Finance minister Rishi Sunak said rising inflation was not just a British problem…

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