(MENAFN- FxPro) Consumer price inflation in the U.K. rose broadly in line with expectations in May, one month after falling into negative territory for the first time since records began, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said the rate of consumer price inflation rose to a seasonally adjusted 0.1% last month, from -0.1% in April. Analyst had expected a reading of 0.1%.
Month-over-month, consumer price inflation increased 0.2% in May, meeting estimates and after following a 0.2% increase in April.
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 0.9% last month, up from 0.8% in April but below forecasts for a reading of 1.0%.
The retail price index increased 1.0% in May, missing expectations for a gain of 1.1% and up from 0.9% in April.
The data also showed that the house prices index rose 5.5% in April, below forecasts for a gain of 10.2% and down from 9.6% in March.
GBP/USD was trading at 1.5579 from around 1.5609 ahead of the release of the data, while EUR/GBP was at 0.7236 from 0.7234 earlier.
Meanwhile, European stock markets held on to losses. London's FTSE 100 shed 0.6%, the EURO STOXX 50 declined 0.9%, France's CAC 40 slumped 0.8%, while Germany's DAX dropped 1.2%.
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