Sterling has extended its gains against the dollar after inflation topped forecasts for July.

Inflation crept up to 0.6 per cent in July, the first full month after the Brexit vote, up above the 0.5 per cent seen in June. Economists had expected the reading to remain steady at 0.5 per cent.

Sterling has jumped 0.4 per cent intraday to $1.2993 since the inflation data was published, taking its gains against the dollar to 0.8 per cent for the day.

Against the euro the pound has recovered from earlier losses and crept back into the black. It was down as much as 0.3 per cent, but is now up 0.1 per cent against the single currency at €1.1518.

If sterling can hold onto its gains against the single currency, this will be its first rise in seven sessions.

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