UK economy: benign inflation data fails to offset sterling's Brexit woes

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Published on May 22, 2019 - Duration: 01:40s

UK economy: benign inflation data fails to offset sterling's Brexit woes

British inflation rose last month by less than investors and the Bank of England had expected - but sterling hit its lowest since January as Theresa May's Brexit plan crumbles.

David Pollard reports.


UK economy: benign inflation data fails to offset sterling's Brexit woes

Life in the fast lane had some looking for a slow, silent moment on Tuesday .... At this World Meditation Day session in London's iconic Gherkin building.

And at least there has been some soothing economic news for the Bank of England.

Inflation in April was expected to bounce above target- and at 2.1 per cent has done - but only just, according to new data.

The modest rise may help stave off fresh rate hikes - while waiting for the outcome of Britain's Brexit impasse.

(UPSOT) (English) BRITISH PRIME MINISTER, THERESA MAY, SAYING: ''I've tried everything I possibly can to find a way through .....'' But: sterling on Wednesday hit its lowest level since a January flash crash .... A signal of despair in markets at the lack of progress through the impasse.

Prime Minister Theresa May's new - or reworked - Brexit plan is failing to win over either opposition lawmakers or many in her own party.

The UK finance minister, meanwhile, was fretting over what that might mean - especially if May is ousted in a leadership challenge.

(SOUNDBITE) (English) UK FINANCE MINISTER, PHILIP HAMMOND, SAYING: "We need to be clear that if we do not resolve this issue in the next few weeks, there's a real risk of a new prime minister abandoning the search for a deal and shifting towards seeking a damaging, no deal exit ....." The pound was down around a third of a per cent at $1.2663, and weakened a quarter of a percent against the euro.

That was positive for exporters on London's FTSE 100 - they gained.

And in other data - house prices in March rose.

Though - with a 1.9 per cent drop in prices in the capital - home owners there might need some extra stress relief.

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