LONDON: British annual inflation grew at the fastest pace for 16 years in July as food prices surged, official data revealed yesterday, scuppering hope of an interest rate cut to spur flagging growth.
“A (British) rate cut within the next couple of months looks well off the agenda,” Capital Economics analyst Vicky Redwood said in response to the “unexpectedly sharp rise” in inflation to 4.4 percent.
The 12-month figure marked the fastest annual rate since April 1992, the Office of National Statistics (ONS) said. It had stood at 3.8 percent in June.
“The largest upward pressure (in July) came from food and non-alcoholic beverages where prices rose this year but fell a year ago,” the ONS said.
“Within this division, there were large upward effects from meat, bread and cereals, and vegetables,” it added.
The statistics office also said that inflation was fueled by higher domestic energy prices.
The 12-month inflation figure meanwhile held above the Bank of England’s 2.0-percent target for the ninth month in a row and compared with market expectations for a rate of 4.1 percent, according to Dow Jones Newswires.
