Despite stronger-than-expected UK inflation data and a recent rate cut by the Bank of England (BoE), the British pound is facing pressure from the U.S. dollar, according to UBS.

The pound briefly rose above $1.27 against the dollar following the release of robust CPI figures, but these gains were quickly reversed, highlighting the strength of the dollar.

The BoE recently cut interest rates by 25 basis points to 4.75% on November 7, reflecting Governor Andrew Bailey's cautious approach to monetary policy. UBS suggests that the market's focus on U.S. dollar momentum, rather than UK-specific developments, is likely to keep the pound under pressure in the near term.