16:55: Sterling set to end deep in the red

Approaching the close of play of the UK trading session we note the pound is mired in the red.

The next hurdle from here are the minutes of the Bank of England MPC meeting for May.

It will take a significant surprise to reverse today's declines. Indeed, history shows us that events such as those witnessed today tend to spark fresh trends. Investors will likely look to push sterling lower on a technical basis.

14:50: A look at our three bellwether currency pairs shows:

The pound euro exchange rate is 0.53 pct lower at 1.1782.
The pound US dollar exchange rate is 0.65 pct lower at 1.5157.
The pound Australian dollar exchange rate is 0.3 pct in the red at 1.5511.

14:00: Pound giving away hard earned gains against Australian dollar

The pound had initially been tipped to advance against the Australian dollar today. Inflation proved to the spanner in the works.

"Last night’s RBA meeting minutes release confirmed the bank’s easing bias, noting that subdued economic growth and benign inflation could give rise to further interest rate cuts. The minutes pointed to the strong AUD when talking about export market weakness," says Richard Driver, analyst with Caxton FX.

11:15: GBP sees heavy selling across the board

Andy Scott, account manager at HIFX, talks us through the decline in the British pound that comes in the wake of today's inflation numbers:

“Sterling fell by around 0.5% against the euro and the U.S. dollar Tuesday morning following the release of consumer price inflation for April, which showed inflation fell by more than expected last month. CPI was up just 0.2% last month and is now running at an annualised rate of 2.4%, a seven month low. That compares with 2.8% the previous month and is the first drop in the rate of inflation for the last six months.

9:40: More on the inflation data

Comment from the cebr:

"Data released this morning by the Office for National Statistics showed annual Consumer Price Index (CPI) inflation fell to 2.4% in April, the first time the annual rate of inflation has fallen since September 2012. This was lower than consensus expectations of a fall to 2.6%. After six months of relatively stable price growth of between 2.7 and 2.8%, inflation was pushed downwards by falling transport costs. Lower oil prices than at the start of the year have provided relief for motorists at the pump, while air passengers have also benefitted from lower fares. Reductions in fuel costs contributed 0.3 percentage points to the fall in the 12-month CPI rate."

9:30: Inflation drops to multi-year lows

UK inflation has come in well below expectations at 2.4 pct for April. GPB falling.

8:44: KBC Markets analyst Piet Lammens comments on today's key sterling driver, UK inflation:

"Today, the UK PPI and CPI data will be published. PPI is already a low levels and the CPI is expected to showing some easing (2.6% Y/Y from 2.8%). A bigger than expected decline in inflation might be seen as giving the BoE some additional room of manoeuvre in case they would feel the need to support the economy further. So, it could be a slightly negative for sterling."