The pound rose after inflation accelerated, fueling expectation that the Bank of England will hold off lowering interest rates for the foreseeable future.

Sterling cemented its position above $1.30, snapping two days of declines versus the dollar after annual inflation picked up for the first time in six months. The currency has also been given a boost by the prospect of greater public spending in a budget next month.

The pound strengthened 0.2% to $1.3018 as of 9:36 a.m. in London. Gilts were little changed at 0.61%, as were money markets, which are pricing in a 76% chance of an interest rate cut this this year.