The Pound has weakened against the US Dollar, Euro and the majority of its most traded peers after data showed that UK Core inflation fell to its lowest level since November 2009, beating economist expectations.
The UK’s inflation rate fell to 2.4% in April, down from the 2.8% recorded in March. Lower petrol prices and air fares also helped the consumer price index (CPI) decline for the first time since September 2012.
The Bank of England lowered its forecasts for inflation last week saying that price growth may hit its target of 2% earlier than previously estimated. The Central Bank, which also raised its growth projections, kept its bond-purchase program at £375 billion this month. Minutes of May’s policy meeting, due to be published tomorrow will show whether Governor Mervyn King continued his bid to boost stimulus.
“The likelihood now is that the peak over the summer will be around 3% rather than 3.5% largely due to the marked overall softening in oil,” Howard Archer, an economist at IHS Global Insight in London, said before the report. “There is a very real chance that inflation could finally get down to the promised land of 2% early in 2015.”
Inflation has been above the BoE’s target of 2% since 2009 but thanks to the declines in commodity prices, policymakers have become more optimistic that the inflation will ease over the next two years.
Core inflation meanwhile, which strips out volatile food and energy components, fell to 2% in April.
Current Pound Sterling (GBP) Exchange Rates:
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5173
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.787
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5501
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8580
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6581
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8464
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6442
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5377
(As of 10:20am GMT)
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