UK inflation hits six-month high

The UK inflation rate unexpectedly rose in August to 2.7%, the highest level in six months.

The rate of Consumer Price Index inflation rose from 2.5% in July, the Office for National Statistics said.

Sterling jumped on the news, rising 0.4% versus the dollar to 1.32.

Rising prices for recreational goods, transport and clothing drove the rise.

Mike Hardie, head of inflation at the ONS, said: “Consumers paid more for theatre shows, sea fares and new season autumn clothing last month.

“However, mobile phone charges, and furniture and household goods had a downward effect on inflation.”