Pound Falls After UK Inflation Data Amid Interest Rate Fears

The British pound slipped in value after the release of August's Consumer Price Index (CPI) data, which showed an annual inflation rate of 3.1% matching forecasts.

Core inflation remained steady at 2.6%, while services prices stayed at 3.4%. The largest price increase was seen in motor fuel, but this did not impact the overall domestic inflation picture.

The market's attention has shifted to the upcoming interest rate decisions of both the US Federal Reserve and the Bank of England.

Futures imply a US interest rate of 4.15% by December and 4.52% by summer 2027, significantly higher than the Fed's last projection of 3.6% next year.