More expensive petrol, clothing and food fuelled by weaker pound powers jump in CPI inflation as City starts to ponder Bank of England interest rate rise
The higher cost of importing fuel, clothes and food pushed inflation back up to 2.9% in August, from 2.6% in July, equalling the four-year high struck in May this year.
The figure was higher than economists’ forecasts and sent the pound to its highest level against the dollar for a year, amid speculation that the Bank of England may be forced to raise interest rates sooner than expected.
Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common.