Carney reveals United Kingdom inflation expectations

The Singapore dollar is expected to weaken against the greenback in the coming months

The pick-up in inflation raises the likelihood of an increase in interest rates - now 0.25% - next month.

The pound sterling exchange rate was trending higher against the euro (GBP/EUR) this morning after the highly-anticipated United Kingdom inflation reading rose to 3.0% in September, a five-and-a-half-year high.

The triple-lock on pensions ensures that recipients are guaranteed a minimum increase each year by whichever is the highest out of September's inflation rate, average earnings or 2.5%. At the moment, the full new state pension is £159.55 per week, equivalent to £8,296.60 per year.

British inflation rose to its highest level in more than five years in September, official data showed on Tuesday, adding to the likelihood that the Bank of England (BoE) will raise interest rates next month.

Four days and one month before to this day, the British pound staged a sterling rally - it soared to pre-Brexit levels against the USA dollar and the Japanese yen (and to a two-month high against the strengthening euro).

There is growing speculation that the MPC could raise interest rates next month, particularly after minutes from its September meeting showed all policymakers believed "some withdrawal of monetary stimulus was likely to be appropriate over the coming months".

The Government has set an inflation target of 2%, with protocol dictating that Mr Carney must contact the Chancellor if inflation exceeds 3% or falls short of 1%.

In the meantime, the feed through from the recent increase in British Gas electricity tariffs and a further rise in motor fuel prices combined to push overall CPI up on the month by 0.3 percent and stimulated the annual rate to 3 percent.

The Office for National Statistics (ONS) said that the key drivers of the rise, up from 2.9% in August, were a combination of air fares, fuel, leisure and food costs either rising or falling less than the same month previous year. The GBP/NZD exchange rate is residing in the region of 1.8446. He said he anticipates having to write a letter to the Treasury explaining why inflation has risen above 3%.

Wages have failed to keep pace with the rising cost of living. After last month's solid rises in clothing and footwear and furniture prices.

Transport costs put upward pressure on the headline rate, recording a smaller month-on-month fall of 1.3% in contrast to a drop of 2.3% in 2016. But there was some uncertainty as to how much more prices would rise in September. The Consumer Prices Index (CPI) climbed to 3%, a level it last reached in April 2012, and up from 2.9% in August.

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