Aug 29 Reuters Sterling hit a onemonth high versus the euro after inflation data from Germany and Spain led investors to increase their bets on European Central Bank interest rate cuts.

Inflation fell in six important German states in August due to lower energy prices, and dropped to its slowest pace in a year in Spain.

The pound was up 0.25 to 84.05 pence per euro, after hitting 84.00, its strongest since July 25.

It was roughly unchanged versus the dollar at 1.3190, having climbed to its highest since March 22 at 1.3269 on Tuesday. It was also on track for a 3.2 rise in August, its biggest monthly gain since November 2023.

The greenback rose, and the euro dropped, after the data.

A cautious monetary policy easing stance from the Bank of England BoE has supported the pound since the central bank39;s cut to its Bank Rate at its August meeting.

The BoE will cut rates just once more this year, in November, a majority of economists said in a Reuters poll, as British inflation is expected to stay above target.

UK finance minister Rachel Reeves39; first budget at the end of October is in focus.

Citi39;s economists expect a revenueraising package of around 20 billion pounds 26 billion overall, which should weigh on growth through next year.

Prime Minister Keir Starmer said on Tuesday he would have to take unpopular decisions, raising the possibility of painful taxes on the wealthy and spending cuts to try to fix Britain39;s myriad of problems he blamed on the previous…