LONDON: Sterling hit a three-week low against the euro on Tuesday while gilt yields dipped, after data showed British inflation fell to a 12-year low in November, leaving the Bank of England under no pressure to raise interest rates.
Reflecting a slide in global oil prices, the consumer price index rose by an annual 1.0 percent in November, compared with 1.3 percent in October, the Office for National Statistics said on Tuesday.
Economists taking part in a Reuters poll had expected the CPI to slip back to 1.2 percent.
The euro rose against sterling to 80.075 pence from around 79.84 pence before the inflation data, but then pared gains to trade at 79.78 pence, up 0.3 percent on the day.
Against the dollar, sterling slipped to a day's low of $1.5610 from around $1.5638 beforehand, before reversing gains to trade up 0.3 percent at $1.5692.
UK 10-year bond yields extended falls, hitting a day's low of 1.757 percent, down around 6 basis points on the day.
Britain's FTSE 100 index rose after the UK inflation data was published. The index was up by 0.3 percent at 6,200.91 points by 0932 GMT.
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