LONDON, July 17 Reuters British inflation held at 2.0 last month, defying forecasts for a slight fall, and underlying price pressures persisted, maintaining uncertainty about the date of the Bank of England39;s first interest rate cut since 2020.

Economists polled by Reuters had mostly expected headline consumer price inflation would ease to 1.9 in the 12 months to June, extending its drop from a peak of 11.1 in October 2022.

Inflation for services was much stronger at 5.7, the Office for National Statistics said, unchanged from May. The Reuters poll had pointed to a slightly weaker 5.6 increase.

Sterling rose against the dollar immediately after the data was published.

The BoE which has a target of consumer price inflation of 2 has expressed concern about the strength of services inflation, which largely reflects pressure from wage growth in a labour market short of candidates to fill jobs.

Data due on Thursday is expected to show wages growing slightly less strongly than in data published a month ago but still rising by almost 6 roughly double the rate that would be compatible with keeping inflation at 2.

The BoE is due to announce its next decision on interest rates on Aug. 1 and investors see a roughly 50 chance of a first cut to borrowing costs since 2020.

A rate cut next month would give an early boost to new Prime Minister Keir Starmer and his finance minister Rachel Reeves who have said they will speed up the slowmoving British economy after winning…