A rebound in inflation could force the Bank of England to issue hawkish guidance

　　An expected rebound in UK (GBR) inflation makes things harder for the Bank of England (BoE), whose inner circle seems poised to complete the last rate hike of the tightening cycle this week, but an inflation rebound means they must signal further tightening.

　　Economists expect UK inflation data on Wednesday to show that the annual rate of consumer inflation accelerated 0.2 percentage points from the previous month to 7 per cent. That would mark the first rebound since February, with economists attributing the acceleration to surging gasoline prices.

　　On Thursday, the Bank of England will announce its decision on interest rates, and all but one of more than 50 economists surveyed by Bloomberg believe the bank will raise rates by 25 basis points, taking the policy rate to 5.5 percent. This is exactly what financial markets are expecting.

　　Andrew Goodwin, chief UK economist at Oxford Economics, said: "The inflation figures are ahead of the Bank of England's August forecast, which is likely to offset other positive data. Services inflation data may also help identify labor market conditions, with wages rising at a record pace even as unemployment rises.