Sterling climbs amid inflationary pressures in UK

Sterling rose in European trade against a basket of major rivals, resuming gains after hiatus yesterday against dollar on profit-taking, while inflationary pressures mount on UK policymakers.

GBP/USD rose 0.25% to 1.3838, with an intraday low at 1.3792, after closing down 0.25% yesterday, the first loss in four days on profit-taking away from six-week highs at 1.3913.

UK consumer prices rose 3.2% in August, the highest rate since March 2012, passing estimates of 2.9%, while marking a 2.0% increase in July. 

The data increased pressure on UK policymakers and bolstered the case for a rate hike sooner than previously expected. 

Rapid UK vaccination efforts and relaxing shutdown measurements led to improvements in economic performance and raised chances of a rate hike next year.