Sterling slid on Wednesday to a new five-month low after weaker-than-expected UK inflation dented the prospect of the Bank of England (BoE) raising interest rates this year.
The pound had been one of the best-performing currencies in 2018 but it has given up all its gains for the year following a broad rally in the dollar and signs Britain’s economy is slowing.
Data on Wednesday showed annual consumer price inflation cooled to 2.4 percent, its weakest increase in over a year.
That sent sterling tumbling to $1.3305, its lowest since Dec. 15..
Investors priced in a one-in-three chance of the BoE raising borrowing costs in August — the next time it updates its economic forecasts — down from 50/50 earlier this week.
At 15:00 GMT the pound was down 0.7 percent to $1.3341 and headed for its biggest daily loss in three weeks.