Sterling rose to August 2 highs against the dollar, following a spate of data from Britain and the US, and after Bank of England's policy decisions.
As of 04:27 GMT, GBP/USD rose 0.44% to 1.3102, with an intraday low at 1.3026, and a six-week trough at 1.3124.
Bank of England's policymakers voted to hold the official bank rate at 0.75%, and the assets purchase program at £435 billion as expected by analysts.
Otherwise, UK Brexit minister Dominic Raan threatened Britain won't pay the Brexir fee if the EU failed to agree to a mutual deal.
The fee is estimated at £39 billion, while the European Commission spokesman said the EU won't reconsider any of the issues already agreed upon, including the fee.
US Inflation, Labor Data
Earlier US data showed consumer prices rose 0.2% m/m in August, same as July, while core prices rose 0.1%, slowing down from 0.2%.
On a yearly basis, consumer prices rose 2.7%, slowing down from 2.9%, while core prices slowed down as well to 2.2% from 2.4%.
Unemployment claims fell a thousand in the week ending September 8 to 204 thousand, while continuing claims fell 15 thousand to 1.696 million.
Federal Reserve Governor Randal Quarles will testify on the implementation of the economic growth, regulatory relief, and the Consumer Protection Act before the Senate Banking Committee, in Washington DC, while Federal Reserve Bank of Atlanta President Raphael Bostic is due to speak about the economic outlook and monetary policy at the Mississippi Council of Economic Education later today.