The pound sterling edged higher against the dollar and euro on Wednesday after UK inflation data for July showed its highest rise in 18 months, easing pressure on markets to expect an imminent Bank of England (BoE) rate cut. The headline consumer price index (CPI) rose to 3.8 per cent in July, up from 3.6 per cent in June, while services sector inflation climbed to 5.0 per cent from 4.7 per cent. Transport costs, particularly air fares, contributed most to the increase. The pound gained 0.1 per cent to $1.3501 against the dollar and 0.1 per cent to 86.18 pence per euro. Economists noted that the BoE's next 25 basis point rate cut is not fully priced until March 2026, with an end-of-year move seen as roughly a 50-50 chance. "The MPC may look for more patience going forward as it balances high near-term price momentum against sluggish labour market data," said Sanjay Raja, chief UK economist at Deutsche Bank. Attribution: Reuters Subediting: Y.Yasser
