Falling Inflation Raises Chances of Cut in Interest Rates

Summary

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THE odds on a cut in British interest rates narrowed sharply yesterday when inflation in January unexpectedly came in below the government's 2 per cent target for the second consecutive month.

On the forex markets, sterling fell nearly one US cent and rate futures rallied after the Office for National Statistics (ONS) said inflation was 1.9 per cent last month. This was the same as the downwardly revised December rate, which was the first undershoot of the 2 per cent target since May 2005.

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Falling Inflation Raises Chances of Cut in Interest Rates

Analysts had predicted a rise to 2.1 per cent and said the BoE may have to revise down its ou...

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