The U.K.’s annual rate of inflation fell for a third straight month in August, surprising economists and increasing the likelihood that the Bank of England may soon pause a series of increases in its key interest rate.
The U.K.’s statistics agency Wednesday said consumer prices in August were 6.7% higher than a year earlier, down from the 6.8% rate of inflation recorded in July. Economists had expected to see a slight pickup in inflation driven by recent rises in oil prices.
While that was a welcome development for the BOE, the more encouraging news was that core inflation—which excludes volatile items such as food and energy—fell more sharply, to 6.2% from 6.9%.
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