UK inflation unexpectedly rose to its highest level in six months in August, driven by a seasonally higher than usual rise in cruise and air travel prices. The annual consumer price index rose by 2.7% from July's 2.5%.
UK house prices rose at their lowest annual rate in 5 years, as a result of a fall in house prices in London, the biggest drop since 2009, by 0.7 percent in July, the National Bureau of Statistics said.
Inflation figures surprised markets and, rather policy makers who were expecting inflation to slow to 2.4% in August. The Bank of England raised interest rates for the second time in a decade in August and indicated further hikes gradually with expected to fall to the target of 2% within 3 years.
Inflation hit a five-year high in November when it hit 3.1% as a result of the impact of the depreciation of the pound after the Brexit referendum in June 2016.
