Sterling rose towards $1.30 again today, with figures showing that speculators have cut bearish bets on the currency by the most in more than a year and the third most on record.
The overwhelmingly negative view on the pound dominating foreign exchange markets since the Brexit referendum in June last year has abated since British prime minister Theresa May called a snap general election a month ago.
Despite softer growth, the pound’s drop since the Brexit vote means the U.K. is facing a sharp inflation pickup. Data on Tuesday is forecast to show that prices rose an annual 2.6 percent in April, the strongest since 2013. A day later, the worsening squeeze on workers will be highlighted in figures expected to show wage growth stuck at 2.2 percent in the first quarter.
The BOE kept its benchmark interest rate at a record-low 0.25 percent last week, though it warned that inflation will rise faster this year than previously predicted.