The pound strengthened against its most major counterparts in the European session on Wednesday, as the nation's consumer inflation accelerated in July, raising expectations for a 50 basis-point rate hike by the Bank of England at the meeting in September.

Data from the Office for National Statistics showed that the UK consumer price index climbed to 10.1 percent on year in July, from 9.4 percent in June. Inflation was forecast to rise to 9.8 percent.

On a monthly basis, inflation eased to 0.6 percent in July from 0.8 percent in June. Economists had forecast inflation to slow to 0.4 percent.

Core inflation, which strips out volatile energy, food, alcoholic beverages and tobacco prices, eased to 6.2 percent from 5.8 percent.

Markets expect the BoE to raise its key rate by 50 basis points to 2.25 percent from 1.75 percent in September.

The GBP/JPY pair touched a 1-week high of 163.07. Next key resistance for the currency is seen around the 166.00 area.

The pound added 0.3 percent against the franc, hitting a 1-week high of 1.1527. The currency is likely to find resistance around the 1.18 level.

The pound advanced 0.1 percent to 0.8399 against the euro, its highest level since August 4. The currency is seen finding resistance around the 0.82 level.

The pound appreciated to a 2-day high of 1.2142 against the dollar around 2 am ET, but it has since eased to 1.2081. The pair had closed Tuesday's deals at 1.2093.

Looking ahead, Eurozone GDP and employment data for the second quarter are set for release in the European session.

U.S. retail sales for July and business inventories for June will be featured in the New York session.

At 2:00 pm ET, the Fed releases the minutes from July 26-27 meeting.

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