UK inflation rises to 3.5% as producer prices beat forecasts
UK annual consumer price inflation (CPI) accelerated to 3.5%, exceeding market expectations of 3.4% and the previous reading of 3.1%.
Monthly CPI rose 0.4%, above the 0.3% forecast, while annual core inflation reached 2.8%, matching expectations but rising from 2.6%. Services inflation also increased to 3.7%, exceeding the 3.6% forecast and the previous 3.4% reading.
Producer prices also showed stronger inflationary pressures. Annual output producer prices increased 4.6%, above the 4.4% forecast, while input prices surged 8.3%, exceeding expectations of 7.6% and the previous 6.1% reading. Monthly input and output prices rose 1.5% and 0.8%, respectively.
Higher-than-expected inflation could encourage the Bank of England (BoE) to remain cautious about interest-rate cuts, potentially supporting sterling and UK bond yields.
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