Investing.com - Consumer price inflation (CPI) in the U.K. came in lower than forecast in April after having hit more than a one year high in the prior month, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation rose by a seasonally adjusted 0.3% last month, below forecasts for it to remain stable at the 0.5% increase seen in March, which had been the highest level since December 2014.
Month-over-month, consumer price inflation rose 0.1% in April, also below forecasts for an advance of 0.3% and following a gain of 0.4% in the prior month.
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 1.2% last month, below forecasts that were looking for it to remain stable at the gain of 1.5% seen in March.
In an immediate reaction, the pound weakened. GBP/USD traded at 1.4479 from around 1.4494 ahead of the release of the data, while EUR/GBP was at 0.7824 from 0.7818 earlier.
Meanwhile, European stock markets traded higher. London’s FTSE 100 gained 0.90%, the Euro Stoxx 50 rose 1.04%, France's CAC 40 traded up 1.01%, while Germany's DAX advanced 0.89%.