Money News Overview Wednesday 17th April: Inflation eases to 3.2%

With no significant economic data scheduled for today, market attention will shift to key UK data releases later in the week.

The governor of the Bank of England has indicated that the UK is still on track for an interest rate cut, as official numbers show a further slowing in the pace of price growth in the economy.

The Office for National Statistics (ONS) disclosed that the consumer prices index (CPI) measure of inflation fell to 3.2% in the year to March, the lowest level in two and a half years. That was lower than the 3.4% figure recorded the previous month, but slightly more than many expected.

This morning’s Eurozone March CPI inflation figures will be the final publication and are expected to corroborate the ‘flash’ estimate. The initial estimate indicated a decline of 2.4%.

Progress in inflation and sluggish growth have enabled the ECB to hint that a first rate decrease in June is still possible, maybe earlier than the BoE or the Fed.

This morning’s minor upward surprise in UK inflation provided some support for the pound and helped it erase some of its previous declines against a generally higher dollar.

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