The U.K. inflation surged to a 30-year high due to higher energy costs, resurgent demand and supply chain issues, while investors are focusing on a rate hike in early February.
Inflation in the U.K. rose to an annual high of 5.4% in December 2021, the highest since March 1992, beating expectations of 5.2% from a Reuters poll. The reading is also higher than a 5.1% level in November.
The rise in inflation triggered expectations from investors for the Bank of England to raise its policy rate again after a 15 basis point hike to 0.25% last December.
From the publication of the Bank of England in November 2021, it expected consumer price inflation at 3.5% in 2022 before falling to 2.25% in 2023, which will be the closest to the central bank’s target of 2%.
