The pound is at its highest rate against the euro for nearly two years after data revealed UK inflation is at its highest rate for a decade.
Interest rates surged to 4.2 per cent in the year to October, more than double the central bank’s target of two percent and the highest level since December 2011. The figures have stoked expectations of an interest rates rise next month lifting the pound while expectations the European central bank will follow suit are low.
Sterling climbed 0.4pc higher against the euro to €1.19 – heights last seen in February 2020. It edged 0.3 per cent higher to $1.3480 against the dollar, its highest level since 10 November.
Runaway inflation comes as the British public faces the highest energy prices on record and global supply chain disruption.
Yael Selfin, chief economist at KPMG UK, said the near-decade high inflation clip will “seal the Bank of England’s resolve to raise rates in December.”
The Institute of Directors’s chief economist, Kitty Ussher, urged the Bank to hoist rates “to show it means business” by getting “inflation expectations back in line with their mandate”.