UK Finance Minister Rishi Sunak said on Wednesday that they have all the tools they need to reduce inflation and added that he expects the Bank of England (BOE) to act forcefully, as reported by Reuters.

"I'm confident we're providing the right support to the economy," Sunak further noted and argued that pay rises need to be proportionate and balanced while saying that pension increases don't affect inflation in the same way as to pay rises.

Market reaction

GBP/USD erased a portion of the losses it suffered after the UK inflation data on these comments. As of writing, the pair was down 0.4% on the day at 1.2225.