Inflation bites in the United Kingdom as households come under price pressure

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Two new members of the Bank of England's Monetary Policy Committee cast some doubt on the likelihood of an increase in interest rates in November, though Governor Mark Carney said a hike "may be appropriate" and many economists remained confident of a hike.

BOE deputy Governor Dave Ramsden was answering United Kingdom lawmaker's questions in a parliamentary committee, alongside new external BOE policy setting member, Silvana Tenreyro.

Tenreyro, meanwhile, aired her opinion that she wasn't yet ready to vote for a rate hike.

A reversal in the Bank's post-Brexit-vote, quarter percentage point cut in base rate looks nearly certain in November, particularly after news today that the consumer price index (CPI) rose at an annual rate of 3% in September.

"My view is that we are approaching a tipping pint at which it would be necessary or justified to remove some of that stimulus", Tenreyro said Tuesday.

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The expected rise in rates comes despite signs that the British economy is faltering - it is growing slower than any other Group of Seven industrial economy this year - and that inflation is expected to ease back down in coming months.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said inflation is likely to peak at 3.1% in October and return to target by late 2018, "discouraging" the Bank of England from raising interest rates a few times over the next 12 months. But, if there are firmer signs that inflationary pressures are building, then she would be inclined to agree with the rate hiking preference of the BOE majority.

'There has been much talk of a rate hike later this year by the Bank of England, but with so many areas of weakness in the economy, and high levels of indebtedness, a rate rise could be a step too far for the Bank of England, at least until there is more clarity on Brexit, ' he said. "We expect that inflation will peak in and around the October figure, October-November figures, peaking potentially above the 3% level". This was in line with consensus expectations and took the annual rate of inflation to a five and a half-year high.

The UK Office for National Statistics has reported a surge in the nation's inflation rate amid ongoing Brexit talks with European Union to determine the terms of the country's exit from the bloc and a weak pound.