How do listeners respond to prediction errors within patterned sequence of sounds? To answer this question we carried out a statistical learning study using electroencephalography (EEG). In a continuous auditory stream of sound triplets the deviations were either (a) statistical, in terms of transitional probability, (b) physical, due to a change in sound location (left or right speaker) or (c) a double deviants, i.e. a combination of the two. Statistical and physical deviants elicited a statistical mismatch negativity and a physical MMN respectively. Most importantly, we found that effects of statistical and physical deviants interacted (the statistical MMN was smaller when co-occurring with a physical deviant). Results show, for the first time, that processing of prediction errors due to statistical learning is affected by prediction errors due to physical deviance. Our findings thus show that the statistical MMN interacts with the physical MMN, implying that prediction error processing due to physical sound attributes suppresses processing of learned statistical properties of sounds.