Prices in the UK rose less rapidly than expected last month. The big question is whether the Bank of England will continue to raise interest rates on Thursday.
Inflation stood at 6.7 percent in August. In October last year, British inflation was still above 11 percent. Since then, the percentage has been decreasing little by little. Inflation was expected to rise slightly in August due to high fuel prices and increased alcohol taxes.
But the surprising drop in inflation, according to the British statistics agency Office for National Statistics, is due to the fact that hotel and air ticket prices became cheaper last month. Food prices also rose less rapidly compared to the same period last year.
The Bank of England said last month it expected inflation to rise to 7.1 percent in August. That’s why many investors expected the state bank to raise interest rates on Thursday. But with inflation falling, it remains to be seen what the bank will do.
The Bank of England’s key interest rate is now 5.25 per cent. This is the highest level in more than fifteen years. Since December 2021, the bank has already increased that rate fourteen times.
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