Sterling falls as UK narrowly misses deflation

The U.K. has narrowly missed slipping into deflation territory, according to official data Tuesday.

Consumer price inflation in the U.K. was steady at 0 percent in March from a year earlier, in line with expectations from analysts polled by Reuters.

Sterling fell to a session low of $1.4618 after the data was released.

The fall in consumer price growth has been attributed to the lower cost of oil and food imports.

There are some concerns that slowing inflation could translate into falling prices, with shoppers withholding purchases in the hope of further price falls, among other factors that could cause a deflationary spiral. The latest data showing steady rather than falling prices could help dispel those fears.

CNBC

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