Sterling slumped to €1.0949 against the single currency - its lowest level in nearly eight years - before paring some of its losses to trade at down 0.19 per cent on the day at €1.0969.
Yesterday's United Kingdom consumer price index data disappointed markets, after showing price growth hold steady on the year for both the overall and core variants. CPI inflation retreated to 2.6% in June from 2.9% in May, effectively killing off any chance of a rate hike in the summer.
This session, official figures to be released at 0830 GMT are expected to show that average weekly earnings rose by a same-again 1.8%, below the 2.6% inflation rate and therefore reducing consumers' spending power.
The data led to speculation that inflation could have peaked already.
The US Dollar was on buoyant form yesterday after July's advanced retail sales data showed an unexpectedly strong increase.
'We expect the committee as a whole to continue looking through inflation spikes in favour of slower growth. We don't expect a rate hike this year.'If wage growth shows some improvement, however, this could offer the GBP USD exchange rate a fresh rallying point, even if the prospect of any BoE rate hike remains distant.
Wells agreed the Bank was unlikely to raise interest rates because of the uncertainty surrounding Brexit and low savings levels.
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He lay there motionless for some time as medical officials rushed to his aid, bringing a wheelchair onto the track. I've proven myself year in, year out, throughout my whole career", Bolt said about his legacy in the sport.
The sharp drop in the value of sterling since the referendum has driven up the cost of imported goods, especially food imports, resulting in a sharp acceleration in price growth.
Even so, any imminent rate hike remains dependent on continued signs of strength from the U.S. economy, putting the emphasis back on domestic data releases.
The Consumer Prices Index (CPI) stood at 2.6 percent last month, the same level as June, the Office for National Statistics said in a statement. He gave the example of regulated rail fare rises, which will jump in January based on July's 3.6% RPI reading.
Chris Williamson, chief business economist at IHS Markit, said real earnings were "likely to continue falling for some time, as inflation exceeds pay growth".
The pound fell against other major currencies after weaker-than-expected inflation data was seen as reducing the prospect of an early rise in United Kingdom interest rates.
Recent retail data suggested that households were scaling back on non-essential purchases in order to cope with rising grocery bills, so increasing earnings is desperately needed if spending is to continue driving the economy.
United Kingdom inflation data is the main release for cable this week as traders look for any clues about when the Bank of England will raise rates.