Sterling jumps to year-high against dollar as inflation nears 3%

Up from 2.6%

Sterling has soared in late morning trading following the news UK inflation beat forecasts to rise to 2.9% in August, from 2.6% in July, with record uplifts in clothing costs contributing to the increase.

Earlier this morning, the Office for National Statistics revealed the UK's Consumer Price Index rose to 2.9%, well above the Bank of England's target of 2%, reaching levels last seen in April 2012.  Sterling rose 0.8% to $1.32730, a one-year high against the US dollar, following the news while the FTSE 100 was down 0.2% to 7,396.72 points. The CPI gain came after the biggest rise in clothes and footwear prices in almost three decades, which surged 2.4% on the month and 4.6% compared with a year earlier. Meanwhile, a renewed fall in sterling and increasing commodity prices also impa...