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UK inflation edges up, meeting expectations

U.K. inflation edged up in October, in line with analyst expectations, as transport costs such as fuel and air fares fell by less than they did a year ago.

Consumer prices rose 1.3 percent year-on-year last month, up from September's five-year low of 1.2 percent, the Office for National Statistics said on Tuesday.

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The news will be welcomed by the Bank of England (BoE), which last week warned that inflation was "more likely than not" to fall below 1 percent over the next six months. It forecast that inflation would then rise gradually, returning to "around 2 percent" in three years' time.

Downward pressure on inflation was likely to come from falling commodity prices, low inflation in the euro zone and the strength of sterling, the BoE warned.

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Despite the slight uptick in inflation, price growth remains well below the BoE's inflation target of 2 percent. As such, BoE Governor Mark Carney is under little pressure to tighten monetary policy in the near future.

Most analysts have pushed back their rate hike expectations to the end of 2015 rather than the beginning, following weaker-than-expected growth and inflation figures.

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Howard Archer, chief U.K. economist at IHS Global Insight, said Tuesday's inflation figures would "do little to dilute" the belief that the central bank would not raise interest rates before the final months of 2015.

"While deflation does not appear to be a serious risk in the U.K. - unlike in the euro zone - the very real prospect that consumer price inflation could remain well below its 2 percent target for a prolonged period could make the Bank of England increasingly wary about raising interest rates at all in 2015, even if growth holds up well," he said in a note.