LONDON Oct 7 A market measure of long-term
British inflation rose on Friday to its highest level since the
end of 2013 at least as sterling took a dive on growing anxiety
that Britain will opt for a "hard" exit from the European Union.
On Friday, the pound tumbled about 10 percent from levels
around $1.2600 to $1.1378 in a matter of minutes in
thin early Asian trade.
The currency's weakness, which increases the cost of
imports, has fuelled expectations for higher inflation.
The five-year, five-year breakeven inflation forward, a
measure of long-term inflation expectations in Britain, rose to
around 3.64 percent at 0833 GMT -- one of its
highest levels since late 2013, according to Reuters data.
At 1148 GMT the forward stood at 3.58 percent.
British gilt yields also rose sharply.
The 10-year gilt yield was up 21 basis points
this week at 0.96 percent and on track for the biggest one-week
rise since August 2015.
(Reporting by Dhara Ranasinghe, editing by David Milliken)