Sterling rose following the release of the Bank of England's Inflation Report, which gave no hint of a forthcoming interest rate cut At 10.42 am, the pound rose to 1.7386 against the dollar from 1.7345 just before the report was released, while the euro dropped to 0.6848 stg from 0.6869 previously Meanwhile, UK short sterling futures -- an indication of interest rate expectations -- also dropped after the report. June futures were trading at 95.53, down 0.04 ticks and down from 95.55 just before the report was released. March futures were also down 0.04 at 95.44, down from 95.47 previously Data yesterday showing the key annual CPI measure dipping below the BoE's 2 pct target in January and December had increased speculation that a cut could be forthcoming in the spring, possibly as early as next month, but today's report makes this unlikely The Bank of England now forecasts CPI inflation to remain around the 2.0 pct target throughout the two year forecast period and even beyond In November, it predicted that CPI inflation will stay above 2.0 pct in the near term before dipping under that level further out as the effects of higher oil prices drop out from the annual comparison The BoE said further increases in energy prices have caused it to revise up its profile for inflation towards the end of 2006. Today's comments suggest that the Monetary Policy Committee is comfortable with rates where they are at 4.50 pct, at least for the time being