U.K. Inflation Rate Increases to 9-Year High - 英通貨膨脹九年新高，增加息࡚

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U.K. inflation unexpectedly quickened in August to match the highest level in nine years, strengthening the case for an increase in interest rates in Europe's second-biggest economy.

Consumer prices rose 2.5 percent from a year earlier, holding above the Bank of England's 2 percent target for a fourth month, the Office for National Statistics in London said today. That matched June's level, the highest since the index began in 1997, and exceeded the 2.4 percent median estimate.

The central bank raised its benchmark interest rate a quarter point to 4.75 percent on Aug. 3 to damp inflation stoked by near-record oil prices and the fastest economic growth in two years. The bank forecast Aug. 9 that inflation will accelerate this year and may breach 3 percent.

Investors raised bets on higher borrowing costs after the report. The yield on the interest-rate futures contract maturing in December rose 0.02 percentage point to 5.21 percent as of 10:42 a.m. in London. The contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the central bank's benchmark rate for the past decade.

The pound rose 0.2 percent against the dollar, climbing to $1.8726 from $1.8684 before the report.

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Inflation is also accelerating in the euro area. European Central Bank council member Nicholas Garganas said today that growth and inflation may exceed the bank's forecasts and suggested he sees scope to keep raising interest rates.

The ECB's benchmark rate is now 3 percent, after four increases since December. The U.S. Federal Reserve has raised its rate 17 times in two years to 5.25 percent to reduce inflation.