The UK Office for National Statistics reported on August 19 that July’s CPI rose by 2.9% year-on-year, higher than June’s 2.6% and the highest since March. Core CPI was flat at 2.6%, while services inflation eased from 3.6% to 3.4%. The main reason for the rebound was energy: Ofgem raised the cap on residential energy prices by 13% starting in July, with natural gas prices up 14.7% month-on-month. After the data was released, the pound against the US dollar briefly rose above 1.3550, and in the New York late session it closed above 1.36 as the US dollar weakened. Market disagreement over the Bank of England’s policy path in September has increased, and inflation resilience may limit room for easing. GBP/USD is for information purposes only and does not constitute investment advice.