The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.6400 figure and was capped around the $1.6655 level. Sterling came off after it was reported U.K. annual consumer price inflation remained below the central bank's 2.0% target for a third consecutive month in August, up 1.6% y/y. This was below July's print of 1.8% and represented the weakest result since January 2005. Sterling was also weaker after Bank of England Governor King reported reducing the interest it pays on deposits could be a useful supplement to current monetary policy. Prime Minister Brown reported the government will reduce fiscal spending to rein in the fiscal deficit. Other data saw the July DCLG house price index off 8.3%. The opposition U.K. Conservative party reported it would seek a loose monetary policy from the BoE if it wins the general election. Cable bids are cited around the US$ 1.6330 level. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ?0.8895 level and was supported around the ?0.8770 level.