Investing.com - Consumer price inflation in the U.K. remained in negative territory for the second straight month in October, underlining concerns over deflationary pressures and reinforcing views that interest rates will remain pegged at record-lows in the near future, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation held steady at a seasonally adjusted -0.1% last month, in line with expectations and unchanged from September.
Month-over-month, consumer price inflation inched up 0.1% in October, matching forecasts and following a decline of 0.1% 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%.
Bank of England officials have said recently they expect inflation to hover around zero for much of this year, before accelerating back to target during 2016 and 2017.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a seasonally adjusted rate of 1.1% last month, above forecasts for a reading of 1.0% and up from 1.0% in September.
The retail price index increased 0.7% in October, missing expectations for 0.9% and down from 0.8% a month earlier.
The data also showed that the house price index rose 6.1% in September, above forecasts for a gain of 5.4% and following a 5.5% increase in August.
GBP/USD was trading at 1.5191 from around 1.5175 ahead of the release of the data, while EUR/GBP was at 0.7016 from 0.7023 earlier.
Meanwhile, European stock markets held on to strong gains. London’s FTSE 100 rose 1.75%, the EURO STOXX 50 rallied 1.8%, France's CAC 40 jumped 1.95%, while Germany's DAX tacked on 1.7%.