The British pound edged lower to $1.34 as traders digested a softer-than-expected inflation report ahead of the Bank of England’s monetary policy decision on Thursday. UK consumer price inflation unexpectedly held steady at 2.8% in May, below expectations of a rise to 3%. Core inflation increased to 2.6%, slightly under forecasts of 2.7%, while services inflation accelerated to 3.7% from 3.2%, broadly in line with expectations. The data suggested that underlying price pressures were less pronounced than feared, reinforcing the cautious, wait-and-see approach favored by some Bank of England policymakers. The central bank is widely expected to leave its benchmark interest rate unchanged at 3.75% this month as it balances still-elevated inflation against a weakening labor market and an economic contraction in April. Investors expect only a single rate increase this year, with a 25bps rise not fully anticipated until December.