LONDON, Nov 15 (Reuters) - Sterling eased on Wednesday after data showed British inflation cooled more than forecast in October, reinforcing expectations that the Bank of England will be cutting interest rates by the middle of next year.
British consumer prices rose by 4.6% in the 12 months to October, from September's 6.7% increase, according to the Office for National Statistics.
This was below forecasts for a reading of 4.8%.
Sterling was last down 0.2% on the day at $1.247 by 0703 GMT, compared with $1.2487 shortly before the data.
The pound staged its largest one-day rise against the dollar in a year on Tuesday, after U.S. data showed the smallest annual increase in underlying consumer inflation in two years, which reinforced the view that the Federal Reserve was probably done raising interest rates.
Money markets show traders believe there is a good chance the BoE could start cutting rates by May next year.
(Reporting by Amanda Cooper; Editing by Alun John)
