UK Inflation Rate at 2.6% Last Month... Highest Since March

The UK’s consumer price index (CPI) inflation rate for last month was recorded at 2.6% year-on-year, the UK Office for National Statistics (ONS) announced on the 18th (local time). This is an increase from the previous month (2.3%) and the highest level in eight months since March (3.2%) this year. It matched market experts' expectations. Rising prices of automotive fuel and clothing drove the inflation.

The core consumer price inflation rate, excluding food and energy, also rose to 3.5% from 3.3% the previous month. The service price inflation rate remained unchanged at 5%. Bloomberg News analyzed this inflation rate by stating that "concerns have grown that the UK economy will face a new year burdened by weak growth, high inflation, and so-called stagflation."

Meanwhile, the Bank of England (BOE) will hold a monetary policy committee meeting on the 19th to decide the base interest rate. With inflation rates continuing to exceed the BOE’s target of 2% over the past several months, many expect the interest rate to be held steady at this meeting. The BOE has cut the base interest rate twice this year, and the current rate stands at 4.75% per annum.