Sterling was on course for its most significant one-day rise against the Dollar in over a week on Wednesday, as the latest UK inflation figures strengthened bets the Bank of England will likely hike interest rates once again.

Consumer price inflation stood at 6.8% in July. Whereas core inflation – not taking into account volatile food and energy prices – remained at 6.9% last month, surpassing economists’ forecasts for a 6.8% figure.

Furthermore, services inflation rallied to 7.4% in July from 7.2% in June.

At the time of writing, Sterling was up 0.3% against the greenback at $1.2736, set for its largest one-day rise since 7th August.

In addition, the Pound edged up 0.1% against the Euro to 85.75 pence.

“Core inflation remains stubbornly high at 6.9% and is now slightly above the headline level,” said Oliver Blackbourn, Multi-Asset Portfolio Manager at Janus Henderson Investors.

“This presents a headache for the Bank of England as it will want to see this less volatile measure decline to suggest that cost pressures are sustainably returning to target,” he added.

Elsewhere, South Africa’s Rand edged up early on Wednesday, reversing some of Tuesday’s losses, ahead of the release of sales data.

The Rand was trading at 19.1125 against the Dollar at the time of writing, up around 0.1% compared to the previous close.

The Dollar was last trading around 0.1% weaker against major rival currencies.

Retail sales data for June is due to be published on Wednesday by Statistics South Africa, with analysts surveyed by Reuters forecasting a decline of 0.2% year on year.

“Retail is vital to a consumption-driven economy such as South Africa and has been weighed down by the cost-of-living crisis,” said ETM Analytics in a research note.

Since December last year, retail sales have contracted in annual terms every month, with ongoing power blackouts a contributing factor, Reuters reports.