British inflation in biggest decline for five years

---

LONDON, Aug 15 (AFP): Britain's 12-month inflation rate fell by the biggest amount in more than five years during July, data showed yesterday, relieving pressure on the Bank of England (BoE) to keep hiking interest rates.
Sterling sank beneath 2.0 dollars for the first time since June as the inflation data meant that the BoE was unlikely to rush to raise borrowing costs, which already stand at a six-year high of 5.75 per cent, analysts said.
Britain's consumer price index inflation slowed sharply to an annual rate of 1.9 per cent in July from 2.4 per cent in June, pushed down by falls in food prices and furniture, as well as utility and petrol costs, the Office for National Statistics (ONS) said in a statement.
"July's quite stunning UK consumer prices data clearly put a question mark over the likelihood of another rise in UK interest rates over the coming months," Capital Economics analyst Jonathan Loynes said.
Last week the BoE's Monetary Policy Committee said 12-month inflation would fall towards the bank's 2.0-per cent target by 2009 as long as interest rates rose to 6.00 per cent in the first-quarter of 2008.
The BoE has raised interest rates on five occasions since August 2006, each time by a quarter-point, to tackle high inflation.