Pound falls sharply against the euro

Sterling fell the most in five weeks yesterday after a report showed UK inflation undershot analyst forecasts, bringing into focus the uncertain economic outlook after the vote to leave the EU more than two months ago.

The currency dropped against most of its 16 major peers after consumer-price growth matched that of the previous month, which still was the highest since late 2014.

The pound fell 1.2% to $1.3175 in London trade. It weakened 1.3% to 85.30p against the euro. Sterling touched a 31-year low of $1.2798 on July 6 and is still down about 11% against the dollar since the June 23 Brexit vote.