By Geoffrey Smith
Investing.com -- U.K. inflation rose to its highest in 40 years in June, as big monthly rises at both the consumer and producer price levels pointed to continued strong price pressure.
Consumer prices rose 0.8% on the month, a shade more than the 0.7% expected, driving the annual rate to 9.4%, from 9.1%.
At the producer level, factory gate prices moderated a little, but by less than hoped, rising 1.4% on the month. That took the annual rate of producer price inflation up to 16.5% from 15.8% in May. May's numbers were also revised higher.
The numbers put fresh pressure on the Bank of England to hike interest rates more aggressively, despite the obvious slowdown in the U.K. economy in recent months, which has seen consumer confidence collapse and a spate of earnings downgrades from domestic consumer-facing companies.
They come only hours after Bank of England Governor Andrew Bailey acknowledged that the Bank will discuss raising its key refinancing rate by 50 basis points at its next meeting on August 4. In his traditional 'Mansion House' speech, Bailey said that "a 50 basis point increase will be among the choices on the table when we next meet," and also mooted the possibility of a faster reduction in the Bank's balance sheet.
The pound weakened on the news, falling around 0.3% of a cent to trade just below $1.2000.