Sterling Edges Higher Amid BoE Inflation Concerns

Sterling rose against most major currencies on Monday, gaining 0.13% to around $1.3256 in European trading, but underperforming against the yen.

The British currency received support from comments by Bank of England officials pointing to ongoing inflation pressures.

Deputy Governor Dave Ramsden's speech tracker reading was 8.4/10 compared to a 7.1/10 historic baseline, with him warning of upside inflation risks from energy, weather, and AI-linked supply chains, as well as indirect effects on food prices and potential second-round dynamics.

Market expectations suggest the Bank of England may tighten monetary policy by around 100 basis points to 4.75% over the next 12 months, with some analysts expecting this to happen by July 2027.