Forexpros – Consumer price inflation in the U.K. declined more-than-expected in October, easing off last month’s record high, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation decelerated to 5.0% in October from 5.2% in September.
Analysts had expected U.K. consumer prices to rise at a rate of 5.1% in October.
Month-over-month, consumer price inflation rose 0.1%, below expectations for a 0.2% increase.
The rate of inflation was more than double the Bank of England’s 2.0% target. The BOE Governor is obliged to write to the Chancellor of the Exchequer every three months that inflation is more than a percentage point above or below its target.
Core CPI, which excludes food, energy, alcohol, and tobacco costs increased by a seasonally adjusted 3.4% in October, up from 3.3% in September. Analysts had expected core CPI to hold steady at 3.3%.
The retail price index rose 5.4% in October, after rising 5.6% in the previous month, compared to expectations for a 5.5% increase.
The ONS said the biggest downward pressure on CPI came from Food, Air Transport and Petrol costs. The largest upward contribution came from clothes, electricity and gas prices.
Following the release of that data, the pound added to losses against the U.S. dollar, with GBP/USD falling 0.36% to trade at 1.5852, the lowest since October 21.
Meanwhile, European stock markets remained lower. The FTSE 100 shed 0.55%, the EURO STOXX 50 dropped 1.5%, France’s CAC 40 slumped 1.4%, while Germany’s DAX retreated 1.45%.
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