UK inflation showed signs of easing as the Consumer Prices Index (CPI) rose 9.9% from a year ago. The latest August CPI data was lower than the 10.1% in July and a haircut from the consensus of 10% which economists had been expecting. Petrol prices fell 6.8%, raw materials declined 1.2%, whilst food and clothing prices rose 1.5% and 1.1% respectively. After headline inflation easing from its highest rate in four decades UK bonds rose, with the yield on 10-year notes dropping 0.05%. As markets assess the latest macro environment the important question now being asked is whether UK inflation is nearing its peak and if monetary policy is helping to relieve inflationary pressure. However, today's news is unlikely to stop the Bank of England (BoE) from delivering further interest rate hikes. The BoE have its next meeting in September 22, in which investors are expecting a 0.5% or 0.75% hike from its current rate of 1.75%.