The headline UK CPI inflation data declined to 2.4% for Aril from 2.5% the previous month and was below consensus expectations of 2.5%.

There was also a decline in the core rate to 2.1% from 2.3% and compared with consensus forecasts of 2.2%.

PPI input prices data was slightly weaker than expected, although there was a 5.3% annual increase from 4.4% previously. PPI output inflation was unchanged at 2.7% with a slightly stronger than expected increase in core prices.

There was downward pressure on prices from air fares due to the timing of Easter, but fuel prices increased.

The data reinforced negative Sterling sentiment with an assumption that the Bank of England would have a stronger reason to delay any increase in interest rates. This would reinforce the underlying lack of yield support and Sterling lost ground again.

GBP/USD declined to fresh 5-month lows just below 1.3350 with only a marginal recovery while EUR/GBP rallied to 0.8775 despite underlying Euro vulnerability.