Inflation in the U.K. hit a fresh 40-year high of of 9.4% in June, driven by surging gas and food prices, according to the Office for National Statistics.
Economists has expected a rate of 9.3%, up from 9.1% in May.
The report will put more pressure on the government to address the country’s cost of living crisis, a challenge made all the more difficult because the ruling Conservative party is undertaking a bruising leadership election.
Bank of England governor Andrew Bailey said on Tuesday that price pressures meant a 50 basis point increase in interest rates was possible at its next meeting.
was virtually steady, trading over $1.20, while the 2-year gilt
fell 7 basis points to 1.97%.
Ellie Henderson, an economist at Investec Securities, noted the core reading of inflation fell for the second month in a row, raising the possibility that measure of prices has peaked. “The details of the report lend support to this view, hinting at some unclogging of supply chains,” said Henderson.