EUR/GBP Rises as On-Target UK Inflation Weighs on Cable

The EUR/GBP pair rose to intraday levels above 0.8570 after UK CPI data showed inflation moving in line with consensus in August.

UK headline CPI accelerated to an annual rate of 3.1% in August, up from 2.9% in July, while core CPI held steady at 2.6% year-on-year.

The Pound weakened against most major counterparts as traders reacted to the data, which broadly confirmed prior expectations rather than delivering a hawkish surprise.

Despite stronger producer price readings, the data did not materially shift investor expectations for Bank of England policy in the near term.