March 20, 2018 / 9:51 AM / a year ago

Sterling dips after UK inflation slows more than expected

FILE PHOTO - Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger

LONDON (Reuters) - The British pound dipped on Tuesday, erasing some of its earlier gains after data showed UK inflation slowed more than expected in February.

Consumer prices rose by an annual 2.7 percent last month, the weakest increase since July of last year as the impact of the 2016 Brexit vote faded from the figures.

A Reuters poll of analysts had expected year-on-year consumer price inflation for February to drop to 2.8 percent from 3 percent the previous month.

Against the dollar, sterling had been trading up 0.2 percent at $1.4054 before the data was released and then fell back to change hands up 0.1 percent at $1.4039.

Versus the euro, sterling fell back from 87.778 pence per euro to trade up 0.1 percent at 87.82 pence.

The FTSE turned slightly higher after the figures but remained within its daily trading range, up 0.15 percent by 0935 GMT.

Gilt futures also gained marginally.

Reporting by Tommy Wilkes and Danilo Masoni; editing by Dhara Ranasinghe

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