The CPI inflation rate remained at its record low of zero last month.
The pound fell almost half a cent against the dollar on the news, dropping to $1.4611 at one point, before recovering to $1.4653.
The lack of inflation suggests any rate rise by the Bank of England remains some way off. Most analysts do not expect a rise until 2016.
Against the euro, sterling was down 0.23% at €1.3856.
After a mixed morning, the FTSE 100 share index was up 10.31 points at 7,074.61 in lunchtime trade.
Mining shares helped to lift the market as they staged a modest rebound following falls on Monday. Anglo American was the top riser on the index, climbing 2.7%, while Rio Tinto was 2.5% higher.
Shares in Aberdeen Asset Management fell 2.3% after investment bank RBC lowered its rating on the company to "underperform" from "sector perform".
Outside the FTSE 100, shares in Poundland rose 2.8% after the discount retailer reported annual revenues had topped £1bn for the first time.
(Noon): A second month of no inflation in the UK pushed the value of the pound lower.