UK inflation hit 2.7% in August to defy expectations and reach its highest level for six months. It effectively means that all of us are poorer – and it will be hoped that it doesn’t keep accelerating in the months ahead. However, some analysts believe that is exactly what will happen, especially if Brexit talks don’t go well.
The pound jumped against the dollar following the release as investors believe it increases the chances of an interest rate rise in the near future. However, the move was scuppered by reports that Brexit negotiations have suffered another blow, as the UK has rejected Europe’s latest offer to solve the Irish border issue.
We also saw house price growth in the UK hit a five-year low. According to the Office for National Statistics, house prices rose by 3.1% in the year to July 2018 from 3.2% in June. In London, prices have shrunk by 0.7% over the last year.
Today we will see retail sales for August and, on Friday, we will see the public sector net borrowing figures for last month.
