Sterling Higher as UK Inflation Increase Keeps Pressure on BoE

Tuesday,   17-Oct-2017   04:47 PM (IST)

The pound was broadly higher on Tuesday after data showing that UK inflation rose to the highest level in five-and-a-half years in September kept up pressure on the Bank of England to raise interest rates next month.The annual rate of inflation rose by 3.0% in September, up from 2.9% in August, the Office for National Statistics reported. That was in line with forecasts and was the highest reading since early 2012.The retail prices index, another measure of inflation, rose by 3.9% in September.The rise in the cost of living, largely driven by the fall in the pound since last year’s Brexit vote, has caused a squeeze on household spending as inflation continues to outstrip wage growth.But the Bank of England has indicated that it expects to raise interest rates in the coming months so long as price pressures continue to increase and growth continues.