Pound weaker as inflation slows

The pound weakened versus the yen, the US dollar and the euro Tuesday after new data showed inflation still slowing in the UK as prices rose just 3.1 percent in December after a gain of 4.1 percent in November, and after Gordon Brown proposed to put another £50 billion into UK banks in an attempt to stabilize the economy.

Among the factors that contributed to the decline in inflation were falling oil prices, retail price cuts as store owners tried to get consumers interested in buying their products and a cut in the value-added tax.

In late morning trade in New York the yen was at ¥125.5193 to the pound after going as low as ¥125.25 earlier, sending the pound to a historic low in relation to the Japanese currency, while at the same time the pound traded at 92.79p to the euro and it took $1.3941 to the US dollar.

Meanwhile, the yen also strengthened in relation to the US dollar and the euro, with the yen trading at ¥90.035 to the greenback and at ¥116.4748 to the euro.

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