The United Kingdom's annual Consumer Price Index (CPI) inflation remained at 2.2% in August, in line with market expectations, according to data released by the Office for National Statistics (ONS) on Wednesday. This figure matches the 2.2% inflation rate recorded in July and remains slightly above the Bank of England's 2.0% target.
Key Highlights:
Core CPI, which excludes volatile food and energy prices, rose 3.6% year-over-year, surpassing both the July reading of 3.3% and the market forecast of 3.5%.
UK Services CPI inflation increased to 5.6% in August, compared to 5.2% in July, continuing its upward trend.
On a monthly basis, UK inflation rebounded by 0.3% in August after a 0.2% decline in July, meeting the market consensus.
Market Reaction: The British Pound (GBP) strengthened following the release of the inflation data, with the GBP/USD pair edging closer to the 1.3200 level. At the time of writing, the pair was trading 0.14% higher, near 1.3175.
This steady inflation rate keeps the pressure on the Bank of England as it navigates its monetary policy in the face of persistently high core inflation.
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