With inflation data in the UK beating expectations at 2.9% year-on-year, sterling has broken recent new ground against both the euro and the dollar.

GBP/USD is just 3 days away from a one-year high and has broken a key resistance level. If the cross closes at this level, Jeremy Naylor explains that there is likely more upside to come for the pound. Against the euro, sterling is at its highest point since 3 August this year.

Added to the picture is the release on Wednesday of jobs data in the UK along with average earnings. Earnings are forecast to be 2.2% and with this number below inflation this causes a real issue for the Bank of England which makes its latest decision on rates on Thursday.

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--- Written by Jeremy Naylor, DailyFX