Sterling hits two-week high after inflation data

Sterling surged on Tuesday to a two-week high after better-than-expected inflation data from Britain, raising expectations of a change soon in the Bank of England monetary policy.

GBP/USD last traded at 1.2482, up sharply from the opening of 1.2366, with an intraday high at 1.2492, and a low at 1.2342. 

Earlier U.K. data showed consumer prices up 2.3% y/y in February, beating expectations of 2.1% and above January's 1.8%, while core prices rose 2.0%, accelerating from 1.6% and reaching the bank's 2% target. 

The last BoE meeting showed one member has voted to increase interest rates amid concerns about rising inflation, raising expectations of a change of monetary policy soon by the BoE.

The inflation data buoyed the pound considerably, while the dollar tumbles against a basket of currencies to a six-week trough, underpinning sterling further after the Federal Reserve reaffirmed its gradual approach to tightening policy.