British inflation jumps, pushing pound to one-year dollar high

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The benchmark consumer-price index rose 3.36% from a year earlier, quicker than July's 2.36% increase.

The all-India general CPI inflation accelerated to 3.36% in August 2017 (new base 2012=100), compared with 2.36% in July 2017.

A statement from the ONS said: "The depreciation of sterling seen in 2016 and particularly following the outcome of the European Union referendum would increase the prices producers pay for imported goods". "The main risk points one needs to watch out for inflation projections going ahead are largely fuel and commodity prices.". "Economists have suggested that now is finally the time that the Bank takes a more hawkish turn, after eight and a half years of ultra-loose policy", said Maike Currie, investment director for personal investing at Fidelity International.

Inflation rose in both Britain and the EU overall, with increasing global commodity prices thought to be partly responsible, although the United Kingdom rate is higher than in all the larger western European nations.

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However, Ben Brettell, senior economist at Hargreaves Lansdown, said inflation is likely to move lower before the end of the year: "It looks likely that inflation will fall back in the coming months, as the effect of Brexit-induced sterling weakness falls out of the year-on-year calculation. All in all, I see more deflationary forces than inflationary in the world economy at present". The annual growth was forecast to increase to 2.8 percent.

The rate however is still below the Reserve Bank of India's (RBI) medium-term target of 4 per cent. The MPC will announce its latest interest rate decision on Thursday, which is broadly anticipated to see rates remain on hold at 0.25%.

The inflation for housing increased to 5.58%, while that for miscellaneous items was higher at 3.85% in August 2017.

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