Carney rules out building interest rate 'war chest' despite inflation rise

Rate hike expected at MPC meeting in November

Bank of England governor Mark Carney has said it would not be "appropriate" to build a "war chest in interest rate terms" to use in case of future shocks, even as he predicted inflation will rise above 3% in the short term.

The UK rate of inflation rose to a five-year high of 3% in September, up from 2.9% the previous month, according to the Office for National Statistics (ONS). The ONS reported this morning the annual rate of UK inflation as measured by the Consumer Price Index had reached its highest level since April 2012 on the back of rising prices for food and recreational goods, along with transport costs, which fell by less than they did a year ago. This will add further pressure on the Bank of England to raise interest rates in November, with Governor Mark Carney and the Monetary Policy Committe...