(May 24): Britain’s inflation rate remained much stronger than expected, with the fastest increase in services and core prices in more than three decades fuelling a flurry of bets on more Bank of England interest rate rises.

The Consumer Prices Index registered 8.7% in April, higher than any of the 36 estimates from economists or the 8.4% reading forecast by the central bank. Core prices excluding food, energy and tobacco accelerated to 6.8% last month from 6.2% in March.

The figures overshadowed the fact that inflation fell into single digits for the first time in eight months and will add to pressure on the Bank of England to keep raising interest rates through the summer. Gilts fell, the pound rose and traders quickly moved to price in further BOE rate increases, betting on almost a full percentage point of hikes through the end of the year.

“With inflation proving stickier than the Bank expected, it now seems all-but certain that the Bank will raise interest rates from 4.50% to 4.75% in June and perhaps a bit further in the months after,” said Paul Dales, chief UK economist at Capital Economics.