Investing.com - Consumer price inflation in the U.K. returned to positive territory for the first time in three months in November, easing concerns over deflationary pressures, 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 0.1% last month, in line with expectations and up from -0.1% in October.
Month-over-month, consumer price inflation was flat in November, compared to forecasts for a 0.1% decline and following a gain 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 1.2% last month, matching forecasts and up from 1.1% in October.
The retail price index increased 1.1% in November, beating expectations for 0.9% and up from 0.7% a month earlier.
The data also showed that the house price index rose 7.0% in October, above forecasts for a gain of 6.4% and following a 6.1% increase in September.
GBP/USD fell to 1.5149 from around 1.5163 ahead of the release of the data, while EUR/GBP was at 0.7271 from 0.7265 earlier.
Meanwhile, European stock markets held on to strong gains. London’s FTSE 100 rose 1.75%, the EURO STOXX 50 rallied 2.2%, France's CAC 40 jumped 2.3%, while Germany's DAX tacked on 2.1%.