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U.K. inflation drops towards BOE target

U.K. CPI slowed to +0.1% on month in October from +0.4% in September and was below consensus of +0.3%.

On year, inflation dropped to 2.2% from 2.7% and vs forecasts of 2.5%.

Core CPI +1.7%.

The drop in annual overall inflation moves the metric closer to the Bank of England's target of 2%. "Low inflation should allow monetary policy to continue to support a strong economic recovery in 2014-15," says Citigroup economist Michael Saunders.

Lower transport costs, including for motor fuels and air fares, and university tuition fees, provided the largest downward pressure on prices.

Factory output prices (PPI) fell 0.3% on month, the largest decline since June 2012.

The pound slides vs the dollar and is -0.7% at $1.5872, while the FTSE 100 is -0.2%. (PR)

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