"The Bank of England will have room to implement more quantitative easing"
- James Knightley, an economist at ING Bank NV
U.K. inflation rate slowed in August compared with the previous month due to smaller rises in furniture and gas prices. Consumer prices grew by 2.5 per cent last month, meeting analysts' expectation, down from 2.6 per cent in July, according to the Office for National Statistics figures.
"The rise in oil prices and food commodities presents some risks for headline inflation in coming months, but with the weak economy implying only limited corporate pricing power, we still expect inflation to fall back to 2 percent by the end of the year," said James Knightley, an economist at ING Bank NV. "The Bank of England will have room to implement more quantitative easing."
"We doubt that the outlook for inflation will dissuade the [Bank] from announcing more asset purchases later this year," said Samuel Tombs from Capital Economics.
The FTSE 100 Index gained 0.65 per cent to 5,819.92. The broader FTSE All-Share Index increased by 0.60 per cent to 3,036.49.
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