UK borrowers brace for more expensive loans as inflation fails to fall as anticipated

By PAN PYLAS
Associated Press

LONDON (AP) — Official figures show that consumer price inflation in the U.K. is unchanged at 8.7% in the year to May against expectations of a modest decline. It’s a development that is likely to see the Bank of England raise the cost of borrowing again. The Office for National Statistics said Wednesday that rising prices for flights, recreational and cultural goods and services, and second-hand cars boosted the inflation rate. Gas prices provided the biggest downward pressure. Financial markets think the unchanged rate will mean the Bank of England will increase its benchmark interest rate on Thursday from the current 15-year high of 4.5%.