UK inflation steady at 8.7% against forecasts for modest fall; Bank of England set to raise rates

LONDON (AP) — Official figures show that consumer price inflation across the U.K. is unchanged at 8.7% in the year to May against expectations for a modest decline, a development that is set to see the Bank of England raise the cost of borrowing again. The Office for National Statistics said Wednesday that rising prices for flights, recreational and cultural goods and services, and second-hand cars boosted the inflation rate, while gas prices at the pump provided the biggest downward pressure. Financial markets think news of the unchanged rate will mean the Bank of England will increase its benchmark interest rate on Thursday from the current 15-year high of 4.5%.