The pound euro (GBP/EUR) exchange rate is falling on Wednesday, dropping below €1.1650.
The pound is falling after cooler-than-forecast inflation. CPI rose to 2.2% YoY, up from 2% in June but below the 2.3% forecast. Service sector inflation, which is closely watched by the BoE, also eased by more than expected to 5.2%, from 5.7%.
The market lifted expectations of a September rate cut to 40% up from 30%.
The euro is rising after Eurozone Q2 GDP confirmed 0.3% growth and after strong German wage growth.
Wage growth in the eurozone largest economy rose 5.6% in H1. Previously ECB President Christine Lagarde has warned that strong wage growth could be a hurdle to cutting rates further,