The UK economy released its annual headline CPI on Wednesday, showing a rise of 3.8% in July, the fastest pace since January 2024. This came in above market expectations of a 3.7% increase, and also higher than the previous reading of 3.6%.

The annual core CPI also rose 3.8%, exceeding both market expectations of 3.7% and the prior reading of 3.7%.

These figures highlight the continued divergence of prices from the Bank of Englands 2% medium-term inflation target, reflecting persistent inflationary pressures on policymakers and reducing the likelihood of a rate cut in September.

This release is positive for the British pound.