UPDATE 1-Sterling hits lowest since May after cool UK inflation surprise

The pound fell to its lowest since late May on Wednesday after data showed UK inflation slowed more than expected in August, softening the case for the Bank of England to raise rates much beyond current levels. British annual consumer price inflation (CPI) unexpectedly fell to 6.7% in August, official data showed on Wednesday, a day before the BoE is expected to raise rates again. Economists polled by Reuters had forecast CPI would rise to 7.0% from July's 6.8% after a jump in fuel prices and an increase in a tax on alcoholic drinks.