Ammon News - Britain's annual rate of consumer price inflation unexpectedly rose to its highest in over a year at 3.6% in June, up from 3.4% in May, above economists' expectations in a Reuters poll for the rate to remain unchanged, official figures showed on Wednesday.

British inflation has risen steadily since touching a three-year low of 1.7% last September, and in May the Bank of England forecast it would peak at 3.7% in September - almost twice the central bank's 2% target.

June's reading from the Office for National Statistics took the annual CPI rate to its highest since January 2024.

Higher transport costs, especially motor fuels, were the biggest contributor to the rise in the inflation rate between May and June, the ONS said.

Sterling rose slightly against the dollar after the data, which may put pressure on the BoE not to cut interest rates at its next meeting in August.

Previously, April brought a particularly sharp jump in inflation to 3.5% due to rises in regulated energy and water tariffs, a spike in air fares, and upward pressure on the cost of labour-intensive services from a rise in employment taxes and the minimum wage.

The BoE has cut interest rates by four quarter-point steps since August and economists polled by Reuters last month forecast two more quarter-point rate cuts this year. Reuters