Aug 14 (Reuters) - Sterling dipped on Wednesday after a softer-than-expected reading on British consumer price inflation supported expectations of further interest rate cuts from the Bank of England (BoE) this year.
The pound fell 0.3% to $1.2824, heading for its first session of decline in five against the dollar. Euro/sterling picked up steam, trading up 0.3% at 85.70 pence.
Consumer price inflation rose to 2.2% in July after two months at the BoE's 2% target, official figures showed, but fell short of economists forecast for an annual rise to 2.3%.
Services price inflation fell to 5.2% in July from June's 5.7%, lower than the Reuters poll forecast of 5.5% and the lowest since June 2022.
Traders are currently pricing in rate cuts of 45.61 basis points from the BoE this year versus 44.6 bps seen on Tuesday.
(Reporting by Sruthi Shankar in Bengaluru, editing by Alun John)
