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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)
  • ETFs - Stocks: FKU, EWU, EWUS, DXPS. Currency: GBB, FXB.
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