Pound Surges as UK Inflation Hits 2.9%

The Pound has regained its highest level since May against the US Dollar, as inflation in the UK continues to rise. The latest Consumer Price Index (CPI) reading showed prices increasing by 2.9% last month, matching forecasts but up from 2.6% in the previous month.

The largest contributor to this increase was housing and household services, largely due to a 14% hike in the Ofgem energy price cap. The UK data is being watched closely ahead of tonight's FOMC minutes, which could influence market sentiment.

Several participants at the recent Federal Open Market Committee (FOMC) meeting suggested that a rate hike may be needed if inflation does not decline. Many also noted that a protracted Middle East war could boost inflation, and that most participants supported holding the federal funds rate unchanged.