LONDON — U.K. inflation held steady during the month of August, data from the Office for National Statistics showed Wednesday, and matched analyst expectations.
The headline consumer price index (CPI) was in line with the previous 2.2% reading in July and also matched a prediction from a Reuters poll of economists. Headline CPI had come in at 2% in May and June, in line with the Bank of England’s target rate.
Services inflation — which is closely watched by the BOE, given its dominance within the U.K. economy and its reflection of domestically-generated price rises — rose to 5.6% in August from 5.2% in July.
Core inflation, excluding energy, food, alcohol and tobacco, came in at 3.6%, up from the 3.3% recorded in July.
BOE policymakers will meet on Thursday to give their latest monetary policy decision, with traders largely expecting the bank to hold rates steady.
Bets for a second consecutive 25 basis point cut doubled to almost 40% this week, however, on the prospect of a more aggressive reduction in borrowing costs when the U.S. Federal Reserve meets Wednesday.
This is a breaking news story and is being updated.
