LONDON (Reuters) - Sterling briefly hit a session high against the dollar on Tuesday after data showed UK annual CPI inflation stayed elevated at 2.7 percent in December.
High inflation will temper the likelihood of the Bank of England opting for more quantitative easing.
However, the pound’s gains were limited, with traders saying investors were focusing on the negative impact of elevated price pressures on an already weak economy. UK producer prices also came in slightly below forecasts.
Sterling briefly rose to $1.6101 from around $1.6090 just before the data. It quickly pared gains and was last flat on the day at $1.6080.
The euro was at 83.15 pence, up from around 83.04 pence just before the data but still down 0.1 percent on the day.
Reporting by Jessica Mortimer