Britain's inflation rate slowed more than expected to the lowest pace in more than a year, a sign that soaring interest rates may be starting to curtail the worst wage-price spiral in the Group of Seven nations.

The Consumer Prices Index was 7.9% higher than a year ago in June, a sharp drop from the 8.7% reading in May, the Office for National Statistics said Wednesday. Economists had expected a decline to 8.2%.

Core inflation also fell, to 6.9% from 7.1%, suggesting the quickest series of interest rate increases in three decades may be starting to rein in soaring prices. That may revive speculation about how many more rate hikes the Bank of England will deliver.

The pound extended losses, falling 0.6% to $1.2959.

 Source : Bloomberg