Pound falls as UK inflation hits 40-year high

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LONDON, May 18 — The pound fell against the dollar today after data showed British inflation rising to 9 per cent, the highest level in 40 years.

The drop reverses most of the gains made yesterday when the pound touched its highest level since May 5.

“Yesterday it looked like with wage growth rising and unemployment so low it meant that the bank had more room for manoeuvre,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Consumer price inflation hit 9 per cent in April, making Britain’s inflation rate the highest of Europe’s five biggest economies and almost certainly the Group of Seven countries, with Canada and Japan yet to report figures for April. Neither are likely to match Britain’s price growth.

 

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