Sterling fell today after data showed surging food prices pushed British inflation into double digits last month, leaving investors to weigh up the outlook for interest rates after the scrapping of most of the government's "mini-budget".

The pound was down 0.4% against the dollar at $1.12750 pence today and down 0.18% versus the euro at 87.220 pence.

Today's inflation data showed the consumer price index increased by 10.1% in annual terms in September, in a new blow for households grappling with a cost-of-living crisis.

The inflation numbers continue a turbulent week for the currency, after Jeremy Hunt on Monday scrapped most of Prime Minister Liz Truss's planned tax cuts and shortened her huge energy price cap plan to six months from two years.

The U-turn on the fiscal plans prompted traders to curb their bets on the Bank of England raising interest rates.

Investors were today pricing in a 65% chance of a full percentage point hike at the next Bank of England meeting scheduled for November 3. Before Monday's U-turns, a move of that size had been fully priced in.

Another factor to consider for market players is the Bank of England's plans to start selling some of its huge stock of British government bonds, which will begin on November 1.

The Bank of England said it was delaying its start date for the launch of its so-called quantitative tightening programme by a day from its previous schedule to avoid clashing with a government fiscal statement on October 31.

Truss has so far defied calls for her resignation, though markets are increasingly considering the possibility of her imminent replacement.