Britain's inflation rate picked up as expected to a seven-year high and hit its 2.0 per cent target in June supported by food prices, official figures showed today.
The Office for National Statistics said consumer prices were unchanged on the month leaving the annual rate as forecast at 2.0 per cent for the first time since the current measure was adopted in December 2003.
It had stuck at 1.9 per cent for the previous three months. CPI was the highest since May 1998 when it was 2.1 per cent, but economists said monetary policymakers were unlikely to be alarmed and the figures did little to alter widespread expectations for a rate cut as soon as August.
British government bonds and short sterling interest rate futures shrugged off the data.
The pound was also unchanged. Bank of England Governor Mervyn King has recently emphasised that monetary policymakers had to balance a marked slowdown in household spending against various upside risks to inflation.