Sterling slipped below $1.32 for the first time in four days today after comments by Bank of England policymakers were interpreted by markets as broadly dovish. 

The pound fell half a percent on the day to as low as $1.3192.

Members of the Bank of England's interest-rate-setting committee were speaking to the UK parliament's Treasury Committee today. 

Silvana Tenreyro, an external member of the monetary policy committee, said the upward pressure on inflation from sterling weakness will start to wane in the coming months. 

Earlier, official data showed Britain's inflation rate hit 3%, above the Bank of England's 2% target but in line with expectations. 

Much of the increase however has been caused by the fall in the value of the pound since last year's Brexit vote which is likely to be a temporary driver of price increases. 

Despite the drop in bond yields and sterling, market expectations from futures and swaps were broadly unchanged with interest rate markets still expecting about two rate hikes over the next twelve months. 

Britain's FTSE - whose international focus tends to make it negatively correlated with sterling - rose slightly to a session high, up 0.2%.