The British pound edged closer to $1.35, remaining near its highest levels since 2022, continuing to benefit from broad-based US dollar weakness and support from the latest UK inflation data, which showed that price pressures remain elevated. The annual inflation rate came in at 3.4% in May, in line with expectations and just below April’s 3.5%. Notably, the April figure would have been 3.4% as well, had it not been for a miscalculation in the Vehicle Excise Duty series. The data reinforced market expectations that the Bank of England will keep interest rates unchanged at its upcoming meeting Thursday, while still leaving the door open for a 25 basis point cut in August.
