The pound euro (GBP/EUR) exchange rate rose to a 2-year high on Wednesday.
Hotter-than-expected UK CPI saw the market scale back BoE rate cuts. CPI was 2% versus 1.9% expected. Service sector inflation was also sticky, at 5.7% versus 5.6% expected.
The market is now proving in just a 30% probability that the BoE will cut in August, down from 50% at the start of the week.
The euro is falling after inflation cooled to 2.5% YoY from 2.6%. The data was in line with the preliminary reading.
The ECB rate decision is tomorrow and the ECB are expected to leave rates unchanged.