Sterling's Struggle: Inflation and Rate Cut Speculations

The British pound strengthened slightly against a weakening dollar but fell versus the euro. Speculation increased over whether the Bank of England might cut interest rates more aggressively as the UK's inflation soared unexpectedly to 3.6%. Investors continue to weigh economic data and its impact on monetary policy.

The British pound strengthened marginally against a softer dollar but dipped against the euro, igniting investor speculation on the Bank of England's possible rate cuts.

With UK's inflation reaching 3.6%, analysts weigh if rates could be slashed more aggressively than the anticipated 25 basis points per quarter.

Mixed economic indicators, including a drop in sterling against the euro, have kept the market cautious as speculation mounts over an expected rate cut in August and further reductions by 2026.

(With inputs from agencies.)