Sterling Down As Inflation Rises
UK inflation rose to 4.7% last month, from 4.4 percent in July, the Office for National Statistics said Tuesday.
The figures underline the BoE's caution about cutting interest rates to revive a stuttering economy but market expectations of rate cuts have gone up sharply this week following trouble at banks.
However, with the price of crude oil having fallen out of bed recently, there is a good chance that inflation is now close to a peak, some analysts say.
Inflation will peak around 5% soon, said Bank of England Governor Mervyn King.
Unless the Bank's MPC believes that there is going to be second round effects from the rise in food and energy bills, there is every reason to expect inflation to fall sharply back towards its target over the coming year.
By 11.45am London time the pound was $1.7846, having peaked above $1.8100 yesterday.
The figures underline the BoE's caution about cutting interest rates to revive a stuttering economy but market expectations of rate cuts have gone up sharply this week following trouble at banks.
However, with the price of crude oil having fallen out of bed recently, there is a good chance that inflation is now close to a peak, some analysts say.
Inflation will peak around 5% soon, said Bank of England Governor Mervyn King.
Unless the Bank's MPC believes that there is going to be second round effects from the rise in food and energy bills, there is every reason to expect inflation to fall sharply back towards its target over the coming year.
By 11.45am London time the pound was $1.7846, having peaked above $1.8100 yesterday.
