Prices in the UK rose less quickly than expected last month. The big question is whether the Bank of England will continue raising interest rates on Thursday.
Inflation reached 6.7 percent in August. In October last year, Britain’s inflation rate was still above 11 percent. Since then, the percentage began to decrease little by little. Inflation was expected to rise slightly in August due to higher fuel prices and increased taxes on alcohol.
But the sudden drop in inflation, according to the British statistics agency’s Office for National Statistics, comes because hotel prices and airline tickets became cheaper last month. Food prices also rose less quickly compared to the same period last year.
The Bank of England said last month that it expected inflation to rise to 7.1 percent in August. Therefore, many investors expected the government bank to raise interest rates on Thursday. But due to low inflation, it remains to be seen what the bank will do.
The Bank of England’s key interest rate is now 5.25 percent. This is the highest level in more than fifteen years. Since December 2021, the bank has already increased this rate fourteen times.
