GBP/USD pulls back as UK inflation jump dampens imminent BoE rate cut hopes

GBP/USD has erased earlier gains and slipped 0.2% to 1.2440 after UK inflation data surprised to the upside, cooling expectations for an imminent Bank of England rate cut. The UK Consumer Price Index rose 8.7% year-on-year in April, above the forecast 8.2% and the previous 8.5%. Core inflation also jumped to 6.8% from 6.6%. The higher-than-anticipated inflation readings suggest the BoE may need to keep interest rates higher for longer to tame price pressures. This realization has taken some steam out of sterling's rally. GBP/USD faced rejection at the 1.2480 resistance and could test support at 1.2400 on a sustained move lower. However, the overall trend remains positive above the 50-day moving average at 1.2360.