UK CPI Report Due: August Inflation Forecast Hits 3.1%

The UK Office for National Statistics (ONS) is set to release the August Consumer Price Index (CPI) data on Wednesday at 06:00 GMT. This highly anticipated report could lead to volatility in the British Pound (GBP) due to its proximity to the Bank of England's monetary policy decision on Thursday.

The central bank is expected to keep its policy rate unchanged at 3.75%, but a rise in inflation could strengthen expectations of an interest rate hike in the coming months. The UK Consumer Price Index is forecasted to increase by 3.1% year-over-year (YoY) in August, up from 2.9% in July.

The Bank of England's decision will be closely watched as it navigates inflationary pressures amidst a potentially vulnerable economy.