Dec 18 Reuters Sterling fell versus the dollar before the Federal Reserve39;s policy meeting later on Wednesday, which could suggest a less aggressive monetary easing path in the U.S., while British inflation figures were in line with analyst expectations.

Consumer prices rose by an annual 2.6 in November, although services inflation held at 5.0.

Money market bets on the Bank of England interest rate outlook were roughly unchanged, with 57 basis points bps of monetary easing expected by the end of 2025 from 55 bps just before the release of the inflation figures. IRPR

Frontend UK rates were softer, with 2year gilt yields down 3 bps to 4.41. The 10year yields were at 4.51, not far from 4.594, their highest since October 2008.

Today39;s data will only reinforce the Monetary Policy Committee39;s MPC message of patience and gradualism, said Sanjay Raja, chief UK economist at Deutsche Bank, arguing the MPC is some way away from declaring victory on inflation.

Price pressures are resurfacing again with employers likely to start ramping up prices at the start of the year to account for the employer National Insurance Contributions39; NIC increase, he added.

The pound softened against the euro , with the single currency up 0.23 to 82.70 pence. The euro hit 82.51 pence last week, its lowest since March 2022.

Investors still expect the pound to be firm as the yield divergence with the euro area will be significant.

While markets price around 55 bps of cut by the BoE in…