Investing.com - Consumer price inflation in the U.K. slowed to the lowest level since records began in January, fuelling 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 decelerated to a seasonally adjusted 0.3% last month from 0.5% in December, broadly in line with market expectations.
Month-over-month, consumer price inflation declined 0.9% in January, compared to expectations for a drop of 0.8% and after holding flat in December.
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 1.4% last month, up from 1.3% in December and above forecasts for a reading of 1.3%.
The retail price index increased 1.1% in January, down from 1.6% in December and below expectations for a gain of 1.3%.
The data also showed that the house prices index climbed 9.8% in December, below forecasts for a gain of 11.1% and down from 10.0% in November.
GBP/USD was trading at 1.5358 from around 1.5340 ahead of the release of the data, while EUR/GBP was at 0.7414 from 0.7422 earlier.
Meanwhile, European stock markets remained mixed. London’s FTSE 100 tacked on 0.1%, the EURO STOXX 50 shed 0.65%, France's CAC 40 dropped 0.55%, while Germany's DAX lost 0.7%.