UK Inflation Overshoots Again, Raising Pressure for Higher Rates
- Government debt tops GDP for the first time since 1961
- Core inflation jumps unexpectedly as price pressures spread
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UK inflation remained higher than expected for a fourth month, leading to a flurry of bets that the Bank of England will raise interest rates to near 6% and drive up the cost of mortgages.
The Consumer Prices Index rose 8.7% in May, the same as the month before, the Office for National Statistics said Wednesday. Core inflation, excluding food and energy, accelerated unexpectedly to a 31-year high of 7.1%. Economists had expected a headline reading of 8.4% and no change for core.