LONDON, May 23 Reuters The pound held broadly steady on Thursday near multimonth highs a day after British Prime Minister Rishi Sunak called a national election and data showed inflation did not slow as much as expected in April.

Sterling was flat on the dollar at 1.2714, having touched a two month high of 1.2761 the day before after data showed British consumer prices rose by 2.3 in annual terms in April, nearing the Bank of England39;s 2 target but slowing less than markets had expected.

The British currency reached its strongest in three months versus the euro in early trade but then weakened after euro zone business activity data helped the common currency to rise 0.2 to 85.26 pence.

Sterling options volatility, a measure of trader demand for protection in the case of large price swings in the future, rose for contracts that cover the election date of July 4.

Twomonth sterling options volatility rose by the most in one day since midApril on Wednesday, and was last at 6.09, though this was still only its highest in a week.

The start of the election campaigns of British Prime Minister Rishi Sunak and his Labour Party rival Keir Starmer, drew eyes on Thursday though analysts said the poll was unlikely to have a major effect on markets.

Sunak39;s Conservative Party trails Labour by around 20 percentage points in opinion polls.

The last time UK politics had any material impact on the pound outside budget announcements was when there was Liz Truss and that was…