Sterling Volatility Looms as UK Inflation Data Meets BoE Rate Decision

The UK is bracing for its inflation data release on Wednesday at 06:00 GMT, which may influence the Bank of England's (BoE) decision to hold or raise interest rates.

Headline Consumer Price Index (CPI) is forecasted to rise to 3.1% year-on-year, up from 2.9%, while core CPI is seen at 2.7% year-on-year versus 2.6%.

The main driver of inflation is energy-related costs, with transport prices rising 9.1% year-on-year in July and unleaded petrol reaching its highest level since November 2022.