The pound advanced against its most major counterparts in the European session on Wednesday, as cooler-than-expected inflation data cemented expectations that the Bank of England is likely to cut interest rate by mid-2024.

Data from the Office for National Statistics showed that consumer prices grew 4.6 percent year-on-year in October, slower than the 6.7 percent rise in the previous month

Inflation was also weaker than the expected 4.8 percent. The rate was the lowest since October 2021.

Month-on-month, the consumer price index remained flat after a 0.5 percent gain a month ago. Prices were expected to rise 0.1 percent.

Excluding energy, food, alcohol and tobacco, core inflation came in at 5.7 percent in October, down from 6.1 percent in September. The rate was seen at 5.8 percent.

Another data from the ONS showed that output prices slid 0.6 percent annually, in contrast to the 0.2 percent gain in September. At the same time, prices edged up 0.1 percent, following a 0.6 percent rise in the previous month.

Input prices logged an annual fall of 2.6 percent, worse than September's 2.1 percent decrease. Prices were expected to fall 3.3 percent. On month, input prices moved up 0.4 percent after rising 0.6 percent, data showed.

The pound edged down to 1.2453 against the greenback and 1.1051 against the franc, from its early highs of 1.2499 and 1.1112, respectively. Next key support for the currency is likely seen around 1.21 against the greenback and 1.09 against the franc.

The pound was down against the yen, at 187.35. If it drops further, it may find support around the 182.00 area.

In contrast, the pound was higher against the euro, at 0.8705. The pound is likely to face resistance around the 0.84 level.

Looking ahead, Canada manufacturing and wholesale sales for September, U.S. PPI and retail sales for October and business inventories for September are due in the New York session.

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