Sterling surged by almost 1% today to its highest level in a year against the dollar after UK inflation rose to its equal highest in more than five years.
The consumer price figures will add pressure on the Bank of England to do more to support the currency.
UK inflation surged to 2.9%, more than forecast and way above the Bank of England's 2% target, as households paid more for fuel and clothing.
This complicates the job faced by policymakers of explaining why they are not raising interest rates.
The pound had already been higher on the day on the back of a vote in Britain's parliament to move the government's European Union withdrawal bill - or repeal bill - to the next stage of a lengthy lawmaking process.
Investors said the passing of the hurdle, while expected, removed a layer of political uncertainty that had been keeping downward pressure on the pound.
After the inflation data, sterling surged to as much as $1.3288 - its highest since September 13, 2016.
Against the euro, too, the pound jumped 1% to 89.84 pence, its strongest in six weeks. The single currency has since moved back somewhat, pushing above the 90p mark once again.
Analysts said that today's inflation data today has highlighted the fact that the Bank of England is still moving gradually towards raising rates.
Short sterling interest rate futures inched downwards, pricing in a marginally higher outlook for Bank of England rates.
London's FTSE 100 index fell slightly as the gains for the pound weighed on the index's mainly foreign-earning constituents.
Expectations of a more hawkish message from the Bank of England - which meets this week - have been at the heart of a recent steadying of the pound, sold heavily in the aftermath of Britain's decision to quit the EU.
Sterling has gained nearly 4% against the dollar in the last three weeks.
Two members of the Bank's Monetary Policy Committee are already voting for higher rates. Any more defections to that camp on Thursday would be liable to drive the currency higher.
But with the economy struggling, many traders doubt the Bank of England's ability to raise rates at all.
UK labour data tomorrow will flesh out the picture further before the Bank of England meets.