The pound fell to the weakest level in a month versus the euro as a report showed the U.K. inflation rate stayed near a five-year low, adding to speculation the Bank of England will delay increasing interest rates.
Sterling dropped against most of its 16 major counterparts before the central bank publishes minutes of its November policy meeting tomorrow. Consumer prices rose 1.3 percent in October from a year ago, compared with 1.2 percent in the previous month, the Office for National Statistics said today. The pound extended a decline against the common European currency after data showed German investor confidence rose for the first time in 11 months.
“Inflation may have picked up but it is still low and there are plenty of things that could push it lower,” said Kathleen Brooks, European research director at Forex.com in London. “We are bearish on the pound. The BOE is likely to delay raising rates until late 2015. We expect dovish minutes tomorrow.”