Investing.com – The pound surged to session highs against the dollar and the euro on Tuesday after data showed that the annual rate of inflation in the U.K. accelerated more quickly than expected in June.
GBP/USD was up 0.31% to 1.7135 from around 1.7080 before the release of the data.
Cable was likely to find support at 1.7100 and resistance at 1.7178, the almost six-year high reached on July 4.
Sterling surged after the Office for National Statistics reported that consumer prices rose 1.9% on a year-over-year basis in June, accelerating from 1.5% in May and well above expectations of 1.6%.
Consumer prices ticked up 0.2% last month, the ONS said, compared to estimates of a 0.1% decline.
The retail price index, a broader measure of the cost of living, rose to 2.6% in June from 2.4% in May.
A separate report showed that the house price index climbed 10.5% in the year to May from 9.9% in the year to April.
The upbeat data added to signs that the economic recovery in the U.K. is deepening, bolstering expectations that the Bank of England will raise interest rates before the end of the year.
Investors were looking ahead to remarks by BoE Governor Mark Carney later in the session. Carney was to testify on the bank’s financial stability report to parliament’s Treasury committee.
EUR/GBP dropped 0.043% to 0.7937 from around 0.7972 ahead of the data.