Sterling needs more than higher UK rates to stay in the fast lane

The pound hit its highest in a year on Wednesday, driven by investors who are scrambling for juicier returns as global interest rates start to fall, but strategists say it will take more than higher rates for sterling to retain that sparkle.

Data on Wednesday showed UK inflation is proving more stubborn than many expected, prompting traders to axe their bets on an August rate cut and sending the pound above $1.30 for the first time since last July .