UK CPI Beats, GBP/USD Rises to 1.29 as BoE Cut Bets Are Pushed Back

UK May CPI came in at 3.4% year-on-year, above the 3.1% consensus and well above the Bank of England's 2% target. Core CPI registered 5.1% with services inflation at a sticky 6.5%, demonstrating persistent inflationary pressures. Following the release, markets pushed back the expected first BoE rate cut from September to November, and GBP/USD jumped to 1.2920, a near seven-month high. BoE Governor Bailey subsequently acknowledged inflation is falling more slowly than expected but emphasized rate decisions will be strictly data-dependent. Analysts believe if June and July data are equally strong, the first cut could be delayed to late 2025.