Pound Holds Steady Amid Oil Price Surge and Interest Rate Expectations

The British pound remained steady on Thursday, poised for its first monthly gain against the dollar since April. Despite escalating U.S.-Iran hostilities driving up oil prices, sterling held firm at $1.338 and was set to rise by nearly 1% in July.

Oil prices surged 4% to reach a high of over $98 per barrel, leading investors to weigh the impact on energy markets and inflation. Britain's economy is also vulnerable to higher energy costs, with economists predicting that domestic inflation will increase later this year.

Modupe Adegbembo, an economist at Jefferies, expects price pressures to continue rising over the summer months. The Bank of England is expected to maintain its lending rate steady when it meets next week, while investors are pricing in a 87% chance of a second interest rate hike by December.