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U.K. inflation falls to record-low -0.1% in April

Published 05/19/2015, 04:35 AM
© Reuters. U.K. CPI falls to record-low -0.1% in April

Investing.com - Consumer price inflation in the U.K. fell into negative territory for the first time since records began in April, underlining concerns over deflationary pressures, official data showed on Tuesday.

In a report, the U.K. Office for National Statistics said the rate of consumer price inflation fell to a seasonally adjusted -0.1% last month, from 0.0% in March. Analyst had expected a reading of 0.0%.

Month-over-month, consumer price inflation increased 0.2% in April, missing forecasts for 0.4% and after rising 0.2% in March.

Bank of England Governor Mark Carney will now have to write an open letter to the Chancellor of the Exchequer, George Osborne, as inflation is more than a percentage point below the central bank's target of 2.0%.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 0.8% last month, down from 1.0% in March and below forecasts for a reading of 1.0%.

The retail price index increased 0.9% in April, meeting expectations and unchanged from in March.

The data also showed that the house prices index rose 9.6% in March, beating forecasts for a gain of 7.7% and up from 7.2% in February.

GBP/USD was trading at 1.5539 from around 1.5558 ahead of the release of the data, while EUR/GBP was at 0.7198 from 0.7189 earlier.

Meanwhile, European stock markets held on to gains. London’s FTSE 100 tacked on 0.5%, the EURO STOXX 50 rallied 2%, France's CAC 40 jumped 1.95%, while Germany's DAX surged 2%.

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