UK inflation falls less than expected

STORY: High prices continue to squeeze British consumers.

The country's inflation rate fell less than expected in April, and a closely watched core measure of price growth surged to a 31-year high.

That's according to official data released Wednesday (May 24).

The consumer price index rose by 8.7% in yearly terms in April.

That was well down on the month before, but above analyst forecasts and the Bank of England's own projections.

It left Britain with the joint highest rate of inflation among the Group of Seven advanced economies along with Italy.

Inflation continued to hurt the spending power of workers whose pay is rising by less.

Food is now the big problem, with prices still rising by more than 19%.

The BoE is worried the surge might lead to a lasting upward shift in wage demands and businesses' pricing strategies,

That has been made worse by a post-health crisis cut in Britain's labor force and problems caused by Brexit.

Core inflation is closely watched by policymakers to assess the persistence of price rises.

It excludes volatile things like energy and food prices, and hit the highest rate since March 1992.

Markets now think the high inflation rate will see the central Bank raise interest rates again next month.

A further quarter percentage point increase is now widely expected at the June meeting.