STERLING HOLDS STEADY AFTER UK INFLATION- The BoE is widely anticipated to keep interest rates at 4%

Sterling held steady against the dollar as UK inflation data reinforced expectations that the Bank of England will keep rates unchanged this week, in contrast to the U.S. Federal Reserve, which is expected to cut rates later on Wednesday.

The pound was little changed at around $1.3638, having hit its highest level since early July on Tuesday against a broadly weaker dollar.

The BoE is widely anticipated to keep interest rates at 4% when it meets on Thursday. Official figures on Wednesday showed inflation at an annual 3.8% in August, in line with a Reuters poll, reinforcing market expectations that further rate cuts are unlikely soon.

Emma Mogford, fund manager at Premier Miton Monthly Income Fund, stated that “In line inflation print is unlikely to move the needle on the BoE’s interest rates decision tomorrow,”

High inflation remains a challenge for Britain’s government as well as the BoE. Finance minister Rachel Reeves said last week that fellow ministers should focus on helping the central bank to slow price growth, as well as boosting economic growth.

Sterling edged up against the euro, which slipped 0.07% to 86.89 pence.