Sterling holds firm after UK inflation data offers little surprise

Sterling held onto early gains against the US dollar on Wednesday after UK inflation data for July rose as expected. The pound was last up 0.14% at $1.3552, continuing a move that had resumed a day after a softer jobs report weighed on the currency. Against the euro, sterling was slightly lower at 85.56 pence. Investors are scanning the latest figures for signs whether the rally—now in its third straight week—can last. Annual consumer price inflation increased to 2.9% in July from 2.6% in June, matching broad forecasts, while the Bank of England pointed to 2.8% in its outlook. Traders still see at least one rate hike, but most Reuters economists expect rates to stay at 3.75%.