UK consumer price inflation rose to 2.9% in August, boosting the British Pound and weighing on the EUR/GBP cross.
The EUR/GBP pair trimmed earlier gains, trading near 0.8555 in early European trading after UK inflation data showed a rise to 2.9%. The increase in consumer prices supported the British Pound, reducing demand for the Euro cross.
UK inflation had previously been reported at 2.2% in July, with economists expecting a modest uptick. The sharper-than-anticipated rise may influence Bank of England policy expectations, adding pressure on the EUR/GBP pair.
The cross remained below session highs as traders digested the inflation print, reflecting a shift in sentiment toward the GBP.