GBP Slumps on Disappointing Inflation Data Ahead of BoE Decision

The Pound (GBP) lost momentum on Wednesday after UK inflation data failed to boost expectations for interest rate hikes. The Bank of England's upcoming policy announcement on Thursday will be a crucial indicator for Sterling's performance, with markets predicting no change in policy.

The Consumer Price Index (CPI) rose from 2.9% to 3.1%, but core inflation remained steady at 2.6%. This lackluster data left the Bank of England's interest rate bets unchanged ahead of Thursday's announcement, causing the Pound to lose support.

The Eurozone's industrial production figures had a limited impact on the exchange rate, as output contracted at a slower pace than expected in July, but June's data was revised down. The common currency trimmed its earlier gains against the Pound after the release of these numbers.