The UK annual inflation data reading surprised the market with an increase above the Bank of England (BOE) 2% target for the first time in almost two years, in May.
According to data published by the Office for National Statistics (ONS) at the beginning of the European session, the consumer price index rose 2.1% year -on -year in May, from 1.5% in the previous month and beat market expectations for a 1.8% rise.
This is the fastest growth rate ever recorded since July 2019, reflecting the continued economic recovery and reopening efforts have borne fruit.
In addition to the ONS report, these encouraging inflation figures have been driven by higher prices of fuel, clothing and recreational goods following more coronavirus restrictions being eased.
However, the data adds to signs of inflationary pressures around the world, although BOE policymakers have previously said they see these price increases as only temporary.
It also worries economists that this rise in inflation will continue in the coming months following the rapid recovery exhibited by the UK economy.
The pound surged higher following this encouraging reading, with the price moving back to the 1.41000 level against the US dollar.
