It was announced in the UK this morning that the Retail Price Index (RPI) measured inflation at 0.0% in the year to February. This is the first time in 49 years that inflation has fallen this low and came as a result of a 0.9% fall on the month. The Consumer Price Index (CPI), a measure of inflation which excludes mortgages, currently stands at 3.2% on the year.
These results are better than expected as many investors were expecting RPI as a measure to fall below 0.0%. The pound has shown good strength in this morning’s trading against a basket of major currencies as this news, as well as improved risk appetite from yesterday’s announcement in the US, sees demand for the pound remain firm. The US government’s Public-Private Investment Programme has buoyed investor confidence and stock markets around the world continue to perform well.
The pound currently stands 1.70% up on the euro and 1.15% up on the US dollar. A market update will follow this post with full data.
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