LONDON, June 22 Reuters The British pound pulled back on Wednesday after data showing UK consumer inflation hit a new 40year high raised fresh worries over an economic slowdown, just as the Bank of England looks set for more interest rate hikes in the coming months.

Soaring food prices pushed consumer inflation to 9.1 in May, the highest rate in the Group of Seven countries and underlining the severity of the costofliving crunch in the world39;s fifthlargest economy.

The figure was in line with market expectations and following its release money markets continued to fully price in a 25 basis point bps BoE rate hike in August. The odds of a 50 bps hike slimmed to just above 60 from around 74, even though analysts said a such a move was still on the cards.

The latest temperature check of the UK economy shows the mercury rising again, with no end yet in sight to the feverish pace of price rises, said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

The Bank of England has already forecast that inflation will hit 11 by the autumn, and it39;s steadily creeping towards that ugly marker sooner rather than later, she added.

Sterling fell against a stronger U.S. dollar but came off near oneweek lows hit shortly after the data. By 0927 GMT it was down 0.4 at 1.223 following two days of gains. Versus the euro , the pound fell 0.2 to 85.96 pence.

The reaction among currency traders was to send sterling lower, as investors fret that rising…