The U.K.'s annual inflation rate hit a hotter-than-expected 3.8%in July, according to data released by the Office for National Statistics (ONS) on Wednesday.

A steep jump in the cost of air travel, along with increases in the price of many everyday items from tea and coffee to potatoes and eggs, helped push the UK’s overall rate of inflation in July to an 18-month high.

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The acceleration comes as the Bank of England continues to cut interest rates, most recently to 4 per cent this month, and follows a rush to complete purchases ahead of the end of the stamp duty holiday in April. Aside from the dip at the start of the tax year, house price inflation has been rising since the start of 2024.

After somewhat positive inflation data in July, the chances of the Federal Reserve cutting interest rates in September are at roughly 83%, according to CME Group 's FedWatch tool calculations on Aug. 18. One month earlier, roughly 59% of traders betting on changes in the federal funds rate thought an interest rate cut would occur in September.

Consumer price inflation in France was stable in July and met analysts' expectations and the preliminary reading, statistics office INSEE said on Thursday.

The cost of wholesale goods and services — where rising inflation tends to show up first — in July posted the biggest increase in three years, possibly heralding a sizable acceleration in price increases tied to higher U.

The Bureau of Labor Statistics reported the producer price index jumped more than expected in July, spurring renewed concerns about inflation's economic impact.