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CITY EXPECTS INTEREST RATES HIKE AFTER INFLATION SURPRISE

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City analysts say this morning's news of a sharp rise in inflation will put added pressure on the Chancellor, Kenne...
City analysts say this morning's news of a sharp rise in inflation will put added pressure on the Chancellor, Kenneth Clarke, to raise interest rates again, reports Radio 5 Live.

The headline inflation figure rose to 2.7% last month, up from 2.1% in September, which is the biggest rise in six years. The underlying figure also rose unexpectedly.

Following yesterday's drop in the number of people registered as unemployed and drawing benefit, the City says the Bank of England is likely to argue for a further increase in interest rates.

Following the announcement of the sharper than expected inflation increases, the City marked down both the FTSE 100 index and government gilts.
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