Gasoline prices drive up US monthly inflation; four UK interest rate hikes expected by next summer – as it happened
News Source
•Fri, 11 Sep 2026 15:58:06 GMT
📰 What Happened
US monthly inflation rose 0.4% in August, driven by higher petrol prices. The yearly rate stayed at 3.4%, and core inflation dipped slightly. On the same day, the UK economy grew 0.4% in July, faster than expected. Growth was helped by AI spending, a heatwave and the football. Markets now expect four UK interest rate rises by July 2027.
UK government borrowing costs rose, and the pound and shares moved as traders reacted.
🔍 The Backstory
Inflation is the rate at which prices rise over time. Central banks raise interest rates to slow it down, which makes borrowing more expensive. US borrowing costs rose as traders bet on another rate rise.
UK growth had been weak for months, so the July figure was a surprise. Analysts warned it hid a weaker picture for many households. Moody's said risks to the UK economy remain high, and KPMG said the rise masks strain on family budgets.
🎯 Why It Matters
Inflation and interest rates decide what you pay for loans, mortgages and food. Higher rates mean bigger repayments for many families and businesses.
US monthly inflation rose 0.4% in August, driven by higher petrol prices. The yearly rate stayed at 3.4%, and core inflation dipped slightly. On the same day, the UK economy grew 0.4% in July, faster than expected. Growth was helped by AI spending, a heatwave and the football. Markets now expect four UK interest rate rises by July 2027.
UK government borrowing costs rose, and the pound and shares moved as traders reacted.
Inflation is the rate at which prices rise over time. Central banks raise interest rates to slow it down, which makes borrowing more expensive. US borrowing costs rose as traders bet on another rate rise.
UK growth had been weak for months, so the July figure was a surprise. Analysts warned it hid a weaker picture for many households. Moody's said risks to the UK economy remain high, and KPMG said the rise masks strain on family budgets.
Inflation and interest rates decide what you pay for loans, mortgages and food. Higher rates mean bigger repayments for many families and businesses.