Inflation in the U.K. rose to 2.9 percent in June, slightly less than analysts had forecast, saving the new Bank of England (BoE) Governor Mark Carney the embarrassment of having to write a letter of explanation to the U.K. government.
Higher motor fuel prices contributed strongly to the increase in inflation, according to the official data, along with clothing and footwear. The gains were weaker for air transport.
Fuel comes under the category of transport which is the largest weighted component of CPI, contributing 14.8 percent of the overall measurement. Transport prices rose by 0.1 percent overall between May and June 2013 compared with a fall of 0.5 percent between the same two months a year ago, the Office for National Statistics (ONS) said.
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The average cost of unleaded petrol rose 1.2 pence a liter in June to £1.34, compared with a fall of 4.3 pence per liter to £1.33 last year.
Diesel prices rose by 0.9 pence this year compared with a 4.7 pence fall a year ago.
Sterling fell and gilts rose following the data, which gave hope to investors that monetary policy in the U.K. will remain loose.