According to the Office for National Statistics, inflation in the United Kingdom's Consumer Price Index accelerated to 2.3% in October from a forecast of 2.2% and well above September's 1.7%. Driven by household energy costs, it was the biggest jump since April.
The core CPI, excluding such volatile items as food and energy, crept up to 3.3% year-over-year, beating September's 3.2% and the market forecast of 3.1%. On a month-over-month basis, the rate of rise in the CPI was 0.6% for October, against the forecast of 0.5%, against flat growth the previous month on the back of broad-based price rises throughout the UK economy.
This saw the GBP/USD capitalize on the data release, surging 0.21% on the day, trading well above 1.2700. The higher-than-expected inflation reading places fresh focus on the policy outlook of the Bank of England as inflation stands further above its 2.0% target.
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