The British pound traded below $1.36 as investors assessed fresh inflation data and its implications for the Bank of England’s policy path. Figures from the Office for National Statistics showed UK inflation slowed to 3.0% in January, the lowest since March 2025, largely due to weaker transport and food price growth. Core inflation also eased to 3.1%, marking its lowest level since August 2021. The data followed a softer-than-expected labor market report released Tuesday. Average weekly earnings, including bonuses, rose 4.2% in the three months to December, the slowest pace since the period to August 2024 and below forecasts, while the unemployment rate climbed to 5.2%, its highest since early 2021. In response, traders have increased bets on interest rate cuts. Markets are fully pricing in a 25-basis-point reduction by April, with a more than a 75% chance of a move as early as March. Two rate cuts are also now fully priced in by November.