Sterling slumps as UK inflation stays at 2.7%

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UK CPI inflation stood at 2.7% for the fourth consecutive month in January, but fears over longer-term forecasts sent sterling to a six month low in early trading.

The figures from the Office for National Statistics were in line with economists' expectations, as alcohol and air fares provided the largest upwards pressure. RPI rose by slightly more than expected, up 3.3% in January from 3.1% in December. Economists had expected a 3.2% rise. Those numbers helped settle currency markets which had experienced notable moves ahead of the report as investors sold down the pound. Sterling fell below $1.56 for the first time since August 2012 in early trading, making it the worst performer of all major currencies, before moving back above that level f...

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