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“We have a very tight labour market but this is not the only factor for inflation,” Bank of England (BoE) policymaker Silvana Tenreyro explained on Tuesday. “There is strong competition in the retail sector and declining business markups are weighing on inflation.”

Regarding the policy outlook, Tenreyro said that it’s important to highlight that the BoE is not in a rush to raise interest rates, per Reuters.

GBP/USD reaction

The GBP/USD pair continues to pull away from the daily high that it set at 1.2815 earlier in the session. As of writing, the pair was up 0.25% on the day at 1.2782.