UK inflation jumps to 2.5%, 3-year high

As the economy bounces back from lockdown, UK inflation jumped to 2.5% in June, close to a 3-year high.

Official data showed higher prices for food, fuel, second-hand cars, clothing and footwear all pushed the index higher.

The reading was well above forecasts, and the Bank of England's 2% target.

Economists say that will put pressure on the central bank to start tapering its massive stimulus spending.

But for now the BoE remains sanguine about inflation.

It predicts price rises will peak above 3%, before falling back.

The bank thinks job losses could rise after government furlough schemes are phased out, taking the heat out of inflation.

But not everyone is so sure.

Departing bank policymaker Andy Haldane has warned of 4% inflation, and the danger that higher price rises could stick around.

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