The U.K. consumer price index fell a touch to 6.7% year-over-year in August from 6.8%, the Office for National Statistics said Wednesday. CPI was expected by economists to rise, to a 7% rate. Core CPI also fell more than expected, to 6.2% from 6.9%, against expectations of a 6.8% gain. The ONS said the largest downward contributions came from food and accommodation services. The knee-jerk reaction in currency markets was to send the pound GBPUSD lower to $1.2343, from $1.2393 on Tuesday. The inflation surprise comes one day ahead of a Bank of England interest-rate decision, in which the central bank was widely seen increasing rates by a quarter point.
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