Investing.com - The pound hit the day’s highs against the dollar on Tuesday after data showing that the annual rate of inflation in the U.K. rose at the fastest rate in almost a year in December.
GBP/USD rose to 1.4340 from around 1.4317 ahead of the report.
The U.K. consumer price index rose 0.1% in December from a month earlier, matching forecasts, the Office for National Statistics said.
The annual rate of inflation rose 0.2%, ahead of forecasts of 0.1% and the highest since January 2015.
Transport costs, particularly air fares, and to a lesser extent motor fuels, were the main contributors to the rise, the ONS said.
The data comes at the end of a year which saw consumer prices inflation hover close to zero, prompting investors to push back expectations on the timing of a rate hike by the Bank of England.
BoE Governor Mark Carney was to give a speech later in the day in which he was expected to outline his thoughts on the economic outlook.
Investors were looking to the speech for any indications on the timing of a possible rate hike.
Sterling also touched session highs against the euro, with EUR/GBP falling to 0.7584 from 0.7599 earlier.