UK inflation stuck at 8.7%, higher than forecast

UK inflation remained stuck at 8.7 per cent in May, worse than the 8.4 per cent expected, raising pressure on the Bank of England to ramp up interest rates.

The BoE is set to raise rates on Thursday by at least 0.25 percentage points to 4.75 per cent. The odds of a larger 0.5 percentage point rise climbed to around 40 per cent, swaps markets indicated, while traders now predict rates will peak at 6 per cent early next year.

Wednesday’s data marked the fourth month in a row that price rises have exceeded forecasts, adding to the gloom afflicting rate-setters, Rishi Sunak’s…