UK inflation as measured by the Consumer Prices Index (CPI) undershot market forecasts to remain at 3% in October, the Office for National Statistics reported on Tuesday.
Sterling was hit - down 0.6% against the euro - as inflation came in lower than analysts' forecasts of a year-on-year rise of 3.1%, with traders re-evaluating what this could mean in terms of the Bank of England's already dovish outlook for further interest rate rises. The Bank of England (BoE) had previously warned the inflation rate could hit 3.2% this autumn, before falling back. But as inflation did not rise above a five-year high of 3%, BoE governor Mark Carney narrowly avoided being forced to write a letter to Chancellor Philip Hammond explaining why it was so far above the Bank's ...
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