UK Consumer Price Index data was released today, showing higher-than-expected inflation numbers across the board for the month of September. CPI rose 0.6% on the month versus the expected 0.4%, the same rise as in August. We also saw a elevation on the annual front, with inflation rising 5.2% since this time last year, compared to the predicted 4.9% and the previous 4.5%. Moreover, the price of retail goods climbed 0.8% last month versus the forecasted 0.5%, and the yearly data showed a rise of 5.6% instead of the predicted 5. A breakdown of the data suggested that the highest price increases came from gas, electricity, fuels, and air transport.

The high inflation numbers are expected to cause more than a slight headache for Bank of England officials, who recently expanded quantitative easing measures with an unexpected 75B increase in their asset purchase program. The measure is expected to increase the flow of cash into the UK economy. Moreover, the BoE is not expected to raise interest rates in the near future so as not to stunt economic growth during hard times; however, this may allow inflation to rise further. Sterling jumped slightly following the CPI data’s release; however any positive reaction in the pound was quickly offset on the realization that the Bank of England is now in a difficult position, and on broad-based concerns about the British economy given a projected broad US Dollar uptrend.