Investing.com -The annual rate of inflation in the UK rose at at the slowest pace in three months in September according to data released on Wednesday, as consumer prices were pulled down by cheaper food prices.
Consumer price inflation rose at an annual rate of 2.4% in September, the Office for National Statistics said. That was below the consensus forecast for a 2.6% rise and compared to the 2.7% rise seen in August.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose by and annualized 1.9% last month, compared to forecasts for 2.0% and the 2.1% pace seen in August.
The report came a day after data showing that wage growth in the UK accelerated at the fastest pace in almost 10 years in the three months to August, indicating that a squeeze on household spending is easing.
The pound extended losses on the weaker-than-expected reading. At 4:47 AM ET (8:47 GMT), GBP/USD was down 0.29% at 1.3145, compared to 1.2153 ahead of the release, while the EUR/GBP traded at 0.8800, compared to 0.8794 before the release.
Ahead of the release, sterling had already been under pressure with all eyes on Brexit negotiations.
UK Prime Minister Theresa May will meet with European Union leaders later on Wednesday where she is expected to attempt to make progress on an agreement over the Irish backstop, one of the current major sticking points in talks.
Little progress is expected at this week’s EU summit as talks stalled over the weekend between UK Brexit secretary Dominic Raab and EU Brexit negotiator Michel Barnier.
Speculation has pointed to the possibility of an extraordinary meeting in November as yet another attempt to iron out details, but an official announcement of such a gathering has yet to be made.
According to a Financial Times report on Wednesday, Barnier commented that he would be open to the possibility of a one-year extension to Britain’s Brexit transition in return for the UK accepting a “two-tier” backstop to avoid a border in Northern Ireland.