Pound falls after lower inflation rates

Inflation for consumer prices as well as producer prices rose at a slower rate in April according to data from the UK Office for National Statistics on Tuesday.

Annual CPI inflation rose at a seasonally adjusted 2.4 percent in April, less than the forecast for a 2.6 percent increase and down from 2.8 percent in March.

Month-over-month, CPI increased 0.2 percent last month, below expectations for a 0.4 percent increase, after rising 0.3 percent in March. Falling fuel costs was the main factor driving down the inflation rate.

Core CPI rose at 2 percent, the lowest level since November 2009. Core CPI excludes food, energy, alcohol, and tobacco costs. This was down from 2.4 percent in March. Analysts’ had expected CPI at 2.3 percent.
Producer prices well and pushed PPI to the lowest in seven months.

The slow pace of inflation will be a relief to Bank of England policy makers and gives more room for stimulus measures if needed to support the UK economy.

GBPUSD dipped to $1.5163 from pre-data levels of $1.5217.

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