The pound was little changed at $1.344, holding above a four-week low of around $1.338 touched on January 15, after fresh data showed UK inflation accelerated more than expected in December, curbing expectations for further interest rate cuts by the Bank of England. Annual inflation rose to 3.4%, up from November’s eight-month low of 3.2% and above market forecasts of 3.3%. Core inflation was unchanged at 3.2%, in line with expectations, while services inflation, closely monitored by the BoE as a gauge of domestic price pressures, edged up to 4.5% from 4.4%, marking a smaller-than-anticipated increase. The data followed a labor market report showing the unemployment rate unchanged at a pandemic-era high of 5.1%. Elsewhere, the US dollar remained under pressure, as heightened tensions between the US and Europe, sparked by President Donald Trump’s escalating threats over Greenland, weighed on confidence in US assets.
