Pound Sterling Holds Steady as UK Inflation Rises to 2.9%

UK inflation rose to 2.9% in July, but softer services prices kept the Bank of England's outlook steady and left Pound Sterling little changed.

The Pound to Dollar exchange rate edged higher towards 1.3552 after the UK inflation release, while GBP/EUR slipped to around 1.1686 as traders found little in the figures to force a rethink on interest rates.

Headline CPI accelerated to 2.9% in July from 2.6% in June, matching the consensus, while core inflation held at 2.6% rather than easing to the expected 2.5%

The slight core inflation overshoot was balanced by evidence that domestic price pressure is not accelerating dramatically.