Investing.com - The pound rallied on Thursday after the UK high court ruled that Prime Minister Theresa May cannot start the process of exiting the European Union without a parliamentary vote.
GBP/USD hit highs of 1.2450, the strongest level since October 10 and was last at 1.2425.
The UK high court ruled that the government does not have the authority to trigger Article 50 of the Lisbon Treaty to start the UK’s exit from the EU without a parliamentary vote.
A formal announcement from the government was expected later Thursday on whether it will appeal to the UK Supreme Court.
The pound had been boosted ahead of the ruling after data showing that activity in Britain’s service sector accelerated to the fastest since January last month, but the data also pointed to a marked build up in inflationary pressures.
Financial data company Markit said its services purchasing managers’ index rose to 54.5 in October from September’s 52.6.
Economists had expected the index to tick down to 52.4.
The survey also showed that a weak pound drove a marked intensification of cost pressures last month. Input price inflation surged to the highest since March 2011, the report said.
Similar surveys of the manufacturing and construction sectors earlier this week also pointed to mounting inflation pressures, indicating that increases faced by companies will soon feed through into prices paid by consumers.
Investors were looking ahead to the Bank of England’s rate decision and quarterly inflation forecasts, due for release later Thursday, but most economists expect no change.