Pound rises as UK inflation data supports case for more rate hikes
The British pound was set for its biggest one-day rise against the dollar in a week-and-a-half on Wednesday, as latest UK inflation numbers reinforced bets that the Bank of England will likely hike interest rates again.

Consumer price inflation slowed to 6.8% in July. But core inflation, which strips out volatile food and energy prices, remained at 6.9% in July, flat versus the June reading, and higher than economist expectations for a reading of 6.8%.
Services inflation picked up to 7.4% from 7.2% in June.
Sterling was last up 0.3% against the dollar at $1.2736 and set for its biggest one-day jump since Aug 7.
It rose 0.1% against the euro, with the single currency last buying 85.75 pence .
"Core inflation remains stubbornly high at 6.9% and is now slightly above the headline level," said Oliver Blackbourn, Multi Asset Portfolio Manager at Janus Henderson Investors.
"This presents a headache for the Bank of England as it will want to see this less volatile measure decline to suggest that cost pressures are sustainably returning to target."
Data on Tuesday showed British wages grew at a record pace in the second quarter, adding to the BoE's inflation worries.
Money market traders now fully price a 25 basis points (bps) hike at the central bank's next meeting in September, with around a 10% chance of a larger half-point rate rise.
Markets also price in a total of 75 bps of tightening by the February 2024 meeting, implying the BoE's bank rate would hit 6%, up from 5.25% currently.
"It's clear that the extent of UK monetary policy tightening required will be more substantial than in the U.S. and euro zone," said Hussain Mehdi, Macro & Investment Strategist at HSBC Asset Management.
"The persistent shortfall in UK labour supply is translating to upward pressure on wages, and thus the need for a “higher-for-longer” interest rate scenario."
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