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The Office for National Statistics said on Tuesday that annual consumer price inflation was unchanged from August at 2.7 percent, confounding economists' forecasts for a slight dip to 2.6 percent.
The pound was up 0.1 percent and hit an intra-day high of $1.6010 from $1.5995 before the data. The euro was down 0.2 percent against sterling and hit the day's low of 84.69 pence, from 84.88 pence beforehand.
Ten-year gilt yields rose to 2.805 percent, their highest since Sept. 25 and more than 5 basis points up on the day, while gilt futures extended losses by more than 10 ticks on the data to hit a three-week low of 109.41, down 59 ticks on the day.