Pound Sterling recovery falters ahead of inflation data

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• Pound Sterling shows signs of further breakdown ahead of August UK inflation data.
• UK headline inflation is seen accelerating due to rising energy prices.
• Uncertainty grows over PM Sunak fulfilling his promise of halving headline inflation to 5% by year-end.

The Pound Sterling (GBP) attempts recovery despite investors remaining uncertain over the UK’s economic outlook. Expectations abound of one more interest rate increase from the Bank of England (BoE), a decision that will be announced on Thursday. The BoE is not in a position to pause the policy-tightening spell as inflationary pressure is stubborn and wage growth momentum is strong.