LONDON, June 13 Reuters The pound rose to its highest in over a month on Tuesday as strong wage growth heaped pressure on the Bank of England to keep raising interest rates while the dollar fell after data showed U.S. inflation cooled sharply last month.

Sterling rose as far as 1.261, its highest since May 11, and was last up 0.72 at 1.26.

Data from the Office of National Statistics ONS showed UK wages in the three months to April grew at their fastest pace on record, excluding during the pandemic, at a clip of 7.2, after an increase in the national minimum wage.

The BoE meets next week to discuss monetary policy. With inflation running above 8 and households and businesses grappling with a costofliving crisis, the central bank must contain price growth without triggering a recession.

In the United States, consumer price growth eased in May to the slowest rate in more than two years, supporting expectations that the interest rate paths of the Federal Reserve and the BoE will diverge, with the former seen holding rates this week.

British twoyear gilt yields rose as far as 4.847, their highest since the 2008 financial crisis, surpassing the peak in September under Britain39;s shortestserving Prime Minister Liz Truss following her largely unfunded minibudget.

The euro was last down 0.15 at 85.85 pence.

The market is saying the BoE is just going to have to keep raising rates, Michael Brown, a markets strategist at broker TraderX said.

Were going to end up with a much…