The British pound strengthened modestly against the US dollar and euro after UK consumer price inflation accelerated to 3.2% in March from 3.0% in February, exceeding economists’ 3.1% forecast. Monthly prices rose 0.6%, driven by transport, housing and food costs. Markets cut the implied probability of a June Bank of England rate cut from 60% to about 45%, with August or September now seen as more likely timing for the first reduction. Sterling briefly rose to $1.2675 before settling near $1.2650, and gained 0.1% against the euro to €1.1700. The limited currency reaction suggests investors had partly anticipated persistent inflation, but the data reinforces expectations that the Bank of England will proceed cautiously. Core inflation held at 4.2%, while services-price pressures remained elevated, well above the Bank’s 2% target. The Monetary Policy Committee is due to meet on May 9, when no rate change is expected, and investors will assess the inflation data against the Bank’s forecasts and Governor Andrew Bailey’s data-dependent policy guidance.