British Prime Minister Rishi Sunak said on Tuesday that inflation in the UK is proving to be more persistent than expected but added that they are using the right tools to battle it.

"Whether that's monetary policy, responsible fiscal policy or supply side reform, that's the right toolkit that you need to deploy bringing inflation down," Sunak explained, per Reuters.

Market reaction

GBP/USD extends its recovery following these comments and the pair was last seen trading at 1.2735, where it was up 0.35% on a daily basis.