Pound hit by UK inflation

28 July, 2011

CurrencyIndex

Further bad news for sterling this morning, as the UK’s Retail Price Index, a key measure of inflation, fell 1.4% in the year to September. A smaller fall was expected.

Lower inflation means that interest rates are even less likely to rise, and tends to be negative for sterling.

Luckily for anyone sending money in Euros, the Eurozone ZEW economic sentiment survey also came in negative, meaning the EUR exchange rate did not fall as much as it might have done otherwise.