Sterling Dips as UK Inflation Slows

Sterling weakened after UK inflation slowed to an annual rate of 2.8% in February, slightly below expectations. The pound fell against both the dollar and the euro. Finance minister Rachel Reeves is planning to announce spending cuts to reassure investors about the UK's public finances amid faltering growth.

Sterling suffered a slight dip on Wednesday following the revelation that UK inflation slowed more than expected in February. The inflation rate dropped to 2.8% from January's 3.0%, underperforming market forecasts. In response, the pound edged down 0.13% against the dollar, trading at $1.2927.

A similar trend was observed against the euro, with the common currency gaining 0.08% to reach 83.45 pence. The currency shifts come amid heightened focus on the British markets as the nation's finance minister, Rachel Reeves, is anticipated to outline spending cuts later in the day.

Reeves' fiscal strategy aims to bolster investor confidence by demonstrating her ability to manage public finances effectively, especially as the UK's economic growth remains sluggish.

(With inputs from agencies.)