The GBP/USD currency pair edged lower on Wednesday, after data showed annual core inflation in the UK had picked up sharply in January and ahead of the FOMC minutes release.

Annual inflation rate in the UK has accelerated to 3% in January, data by the Office for National Statistics showed, from 2.5% in December. It has been the highest rate since March 2024.

Market consensus had pointed to a slower increase – to 2.8%.

Services inflation surged to 5% from 4.4% in December, but came below the BoE’s forecast of 5.2%.

And, UK’s annual core CPI inflation, which excludes volatile categories such as food and energy, accelerated to 3.7% in January from 3.2% in the prior month.

The latest CPI data could prompt the Bank of England to slow its monetary easing cycle.

Market focus now sets on the minutes of the Federal Reserve’s January meeting due later today for clues over how policy makers have weighed the risk of a broader tariff war.

The GBP/USD currency pair was last edging down 0.18% on the day to trade at 1.2589.