Investing.com - The euro fell to 16-month lows against the pound on Tuesday after data showed that inflation in the U.K. rose more strongly than expected last month but also indicated that that consumer prices are rising faster than wages.
EUR/GBP was last at 0.8138, down 0.17% for the day after falling as low as 0.8120 earlier, the weakest level since early January 2013.
The pair was likely to find support at 0.8120 and resistance at 0.8175.
The annual rate of consumer inflation in the U.K. rose to 1.8%, up from 1.6% in March and ahead of expectations for 1.7%, the Office for National Statistics said.
That means prices are rising faster than wage growth after data last week showed that average earnings rose by 1.7% in the three months to February, and by only 1.4% excluding bonuses.
The rise in inflation was due in part to higher transport costs, the ONS said, as airlines pushed up ticket prices in time for the Easter holidays.
On a month over month basis, consumer prices increased by 0.4% in April, compared to estimates for a 0.3% rise.
The ONS also said that U.K. house prices rose by 8.0% in March from a year earlier, slowing from 9.2% in February. House prices in London jumped 17% in the last 12 month, it added.
The euro remained under pressure from mounting expectations for monetary easing by the European Central Bank at its next meeting in June and data last week showing that the euro zone economy grew at a slower than forecast rate in the first quarter.
Elsewhere Tuesday, GBP/USD was at 1.6830, 0.10% higher for the day after briefly touching session highs of 1.6864.
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