Pound Holds Firm Despite Soft UK Inflation

The British pound held steady against the dollar on Wednesday after inflation data came in softer than expected. According to Reuters, sterling was trading flat at $1.3373, having depreciated for four consecutive sessions.

Despite the lower-than-anticipated inflation reading, market expectations for interest rate hikes later this year remained intact. The Bank of England's lending rate is likely to stay steady when it meets next week, with investors fully pricing in a quarter-point rate hike by December and a 56% chance of another increase.

John Healey, Britain's new finance minister, welcomed the data but acknowledged that the government needed to do more to help households. The pound is one of the better-performing G10 currencies this year, having lost only 0.8% in value against the dollar so far in 2026.