Surprise rise in UK inflation rate to 2.6%

UK - UK inflation has risen much more sharply than expected in August.

The underlying rate of inflation rose by 0.4% last month to 2.6%, just above the government's target level of 2.5%.

It is the first time that inflation has risen to above the target level for 28 months.

The unexpected rise raises difficulties for the Bank of England, which had been expected to cut interest rates on Tuesday, mirroring cuts by the European Central Bank and the US Federal Reserve on Monday.

A central bank would

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