Inflation hits 17-month high

This morning’s UK inflation figures showed a rise to 3.7%, higher than analysts expected and the highest UK inflation for over a year.

Although this means the Bank of England might need to raise interest rates sooner than might have been the case, which would normally give the Pound a boost, the news has not been taken well, because it puts the Bank’s predictions of inflation to come back down to its target levels in the shade.

Sterling has therefore actually fallen slightly on the news.

Tomorrow morning’s interest rate minutes from the Bank of England will now be of increased interest for the Pound’s fortunes.