Investing.com - Consumer price inflation in the U.K. slowed to a five-year low in September, dampening prospects of an interest rate increase by the Bank of England, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation slowed to a seasonally adjusted 1.2% last month from 1.5% in August. Analysts had expected U.K. CPI to fall to 1.4% in September.
Month-over-month, consumer price inflation was flat in September, after rising 0.4% in August.
"Falls in transport costs (notably sea fares and air fares) and prices for a range of recreational goods provided the largest contributions to the slowdown in the rate of inflation between August and September," the U.K.'s Office for National Statistics says.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 1.5% last month, down from 1.9% in August. Analysts had expected core prices to rise 1.8% in September.
The retail price index increased 2.3% in September, meeting expectations and down from 2.4% in August.
The data also showed that the house prices index climbed 11.7% in August, unchanged from July and below forecasts for a reading of 12.3%.
GBP/USD was trading at 1.5982 from around 1.6016 ahead of the release of the data, while EUR/GBP was at 0.7938 from 0.7916 earlier.
Meanwhile, European stock markets remained broadly lower. London’s FTSE 100 shed 0.15%, the DJ Euro Stoxx 50 fell 0.25%, France's CAC 40 dipped 0.2%, while Germany's DAX declined 0.1%.