Pound Strengthens as BoE Rate Hike Fears and Energy Concerns Rise

The British pound has strengthened against the US dollar, trading above $1.35 on Wednesday due to concerns over inflation and potential interest rate hikes by the Bank of England.

Escalating tensions in the Middle East have raised fears about energy supplies, leading investors to expect further rate hikes. The UK 10-year gilt yield remains at a high of 5.2%, close to its 19-year peak.

The pound's gain is also attributed to the pullback in the dollar index under the 99 mark, as well as the rising yen. Additionally, UK Chancellor John Healey has announced measures aimed at boosting economic growth and attracting private investment, which is supporting the GBP/USD pair.