The pound has hit a new 2021 high this morning after the UK’s latest inflation reading. Inflation came in at 4.2% year-on-year in October, higher than estimates of 3.9% and a jump from last month’s reading of 3.1%. It’s the highest reading since December 2011.
This increase is mainly due to the cost of housing and utilities, reflecting the surge in energy and gas prices.
Sterling has strengthened following this, building on gains made yesterday after positive jobs data. There are now increasing expectations that higher inflation may prompt the Bank of England to raise interest rates in December.
