Pound Falls as Drop in Core Inflation Adds to `Brexit' Concerns
- Headline rate rises while remaining well below BOE's 2% target
- Inflation data come two days before EU summit in Brussels
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The pound weakened after data showing a slowdown in U.K. core inflation further diminished the prospect of a Bank of England interest-rate increase in 2016.
Sterling dropped to a two-week low against the dollar and sank versus all but two of its 16 major peers before a crucial European Union summit in Brussels where the British government will try to reach a deal altering the terms of its membership. While the U.K.’s headline inflation rate for January quickened to 0.3 percent, that’s still a fraction of the BOE’s 2 percent target, suggesting officials won’t be able to tighten policy for some time.