Sterling jumps as UK Inflation exceeds 2% target

Consumer Price Index figures have beaten the consensus 2% forecast for February, revealing inflation running at 2.3% year-on-year. This compares to January's rate of 1.8% and represents the first time since 2013 that it has exceeded The Bank of England's 2% target. Sterling has seen strong gains against major currencies such as the US Dollar and Japanese Yen in the immediate wake of the news, gaining 0.85% against the US Dollar and helping to send the US Dollar Index - a measure against a basket of its peers – below 100 for the first time since February. This appreciation will contribute to a muted day in the FTSE 100 as foreign earners see their profits contract, with the index down 0.22% at the time of writing. UK government debt is also seeing a strong rise in yields today (which move inversely to price) as investors move away from the assets that are the most likely to be eroded by inflation.