Pound Sterling Holds Steady as UK Inflation Hits 2.9%

The UK's inflation rate rose to 2.9% in July, as expected by economists, but softer services prices kept the Bank of England's outlook steady.

The Pound Sterling showed little reaction to the news, with GBP/USD edging higher towards 1.3552 and GBP/EUR slipping to around 1.1686.

Services inflation slowed to 3.4% from 3.6%, while core inflation held at 2.6%. Pantheon Macroeconomics noted that 'inflation is heading to around 3.5% in November'.

Lloyds said the report shouldn't nudge the Bank of England's Monetary Policy Committee (MPC) from its current steady stance, citing soft labour market and private sector wage growth.