Investing.com – Consumer price inflation in the U.K. rose unexpectedly in December, jumping to the highest level since April 2010, official data showed on Tuesday.
In a report, the U.K. Office for National Statistics said that the rate of consumer price inflation was a seasonally adjusted 3.7% in December, up from 3.3% in November.
Analysts had expected consumer price inflation to remain unchanged at 3.3% in December.
The rate of inflation was significantly higher than the Bank of England’s 2.0% target. The BoE Governor is obliged to write to the Chancellor of the Exchequer every three months that inflation is more than a percentage point above or below its target.
According to the report, the main factors affecting CPI were an increase food and non-alcoholic drinks prices, which rose by 1.6%, and a rise in fuels and lubricants, which increased by 2.8%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose unexpectedly in December, increasing to a seasonally adjusted 2.9% in December, defying expectations for a drop to 2.6%.
Following the release of the data, the pound was up against the U.S. dollar, with GBP/USD rallied 1.01% to hit an eight week high of 1.6049.
Meanwhile, European stock markets were broadly higher. The FTSE 100 surged 1.02%, the EURO STOXX 50 jumped 0.97%, France’s CAC 40 gained 0.67%, and Germany's DAX was up 0.82%.
In a report, the U.K. Office for National Statistics said that the rate of consumer price inflation was a seasonally adjusted 3.7% in December, up from 3.3% in November.
Analysts had expected consumer price inflation to remain unchanged at 3.3% in December.
The rate of inflation was significantly higher than the Bank of England’s 2.0% target. The BoE Governor is obliged to write to the Chancellor of the Exchequer every three months that inflation is more than a percentage point above or below its target.
According to the report, the main factors affecting CPI were an increase food and non-alcoholic drinks prices, which rose by 1.6%, and a rise in fuels and lubricants, which increased by 2.8%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose unexpectedly in December, increasing to a seasonally adjusted 2.9% in December, defying expectations for a drop to 2.6%.
Following the release of the data, the pound was up against the U.S. dollar, with GBP/USD rallied 1.01% to hit an eight week high of 1.6049.
Meanwhile, European stock markets were broadly higher. The FTSE 100 surged 1.02%, the EURO STOXX 50 jumped 0.97%, France’s CAC 40 gained 0.67%, and Germany's DAX was up 0.82%.