Investing.com - Consumer price inflation (CPI) in the U.K. came out slightly higher than forecast in June, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation (CPI) rose by a seasonally adjusted 0.5% last month, above forecasts for a gain of 0.4% and compared to the 0.3% increase seen in May.
Month-over-month, consumer price inflation rose 0.2% in June, in line with forecasts and stable with regard to the prior month’s increase.
Bank of England Governor Mark Carney will once again have to write an open letter to the newly appointed Chancellor of the Exchequer, Philip Hammond, 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 1.4% last month, above forecasts for a gain of 1.3% and compared to the 1.2% advance in May.
The retail price index (RPI) increased 1.6% in June, above forecasts for a 1.5% gain and compared to May’s reading of a 1.4% increase.
Month-on-month, RPI rose 0.4% in June, above expectations for a 0.2% gain and compared to the prior month’s increase of 0.3%
Core RPI increased at an annualized rate of 1.7% in June, after the 1.5% gain seen in the previous month.
Month-on-month, core RPI gained 0.4%, compared to May’s reading of a 0.3% advance.
In an immediate reaction, the pound strengthened. GBP/USD traded at 1.3212 from around 1.3186 ahead of the release of the data, while EUR/GBP was at 0.8377 from 0.8392 earlier.
Meanwhile, European stock markets traded lower. London’s FTSE 100 fell 0.35%, the benchmark Euro Stoxx 50 lost 1.05%, France's CAC 40 traded down 0.83%, while Germany's DAX shed 1.09%.