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UK Annual Inflation Holds at 5-year High in October, Missing Expectations

Economic IndicatorsNov 14, 2017 04:32AM ET
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UK CPI rises 3.0% in October vs. 3.1% forecast

Investing.com - Consumer price inflation (CPI) in the UK held steady at a five-year high in October, missing expectations for a slight uptick, official data showed on Tuesday.

In a report, the UK Office for National Statistics (ONS) said the rate of consumer price inflation rose from the year before by a seasonally adjusted 3.0% last month matching September’s reading.

That was below forecasts for a 3.1% increase but remained at its highest level since March 2012.

Month-over-month, consumer price inflation rose 0.1% in October, also below consensus expectations for a 0.2% advance and compared to the 0.3% gain registered in the previous month.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 2.7% last month, also in line with September’s increase and missing expectations for a gain of 2.8%.

The retail price index (RPI) increased by 4.0% on annualized basis in October, compared to previous month’s 3.9% rise. Analysts had expected inflation to increase to 4.1%.

Month-on-month, RPI increased by just 0.1% in October, in line with a month earlier and compared to the forecast for a 0.2% gain.

Core RPI increased as expected at an annualized rate of 4.2% in October, higher than the 4.1% rise registered a month earlier.

Month-on-month, core RPI held steady at a 0.1% gain last month.

The data also showed that the house price index rose 5.4% in October, above forecasts for a gain of 5.2% and following a 4.8% increase a month earlier. September’s data was revised from an initial 5.0% rise.

The ONS indicated that rising prices for food and, to a lesser extent, recreational goods provided the largest upward contributions to change in the rate between September 2017 and October 2017.

“The upward contributions were offset by falling motor fuel and furniture prices, along with owner occupiers’ housing costs, which remained unchanged between September 2017 and October 2017, having risen a year ago,” the ONS said.

Following the report, GBP/USD traded at 1.3091 from around 1.3116 ahead of the release of the data, EUR/GBP was at 0.8949 from 0.8925 earlier while GBP/JPY changed hands at 148.90, compared to 149.33 previously.

Meanwhile, European stock markets showed mixed trade. London’s FTSE 100 gained 0.19%, the Euro Stoxx 50 fell 0.19%, France's CAC 40 inched up 0.07%, while Germany's DAX edged forward 0.03%.

UK Annual Inflation Holds at 5-year High in October, Missing Expectations
 

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