Sterling Holds Firm Amid Rising Inflation Bets and Crude Price Surge

The British pound was largely unchanged at just above $1.35 as investors continued to bet on further interest rate hikes from the Bank of England.

This move comes amid renewed concerns about inflation, which has supported expectations for additional rate increases.

Brent crude oil prices approached $100 a barrel, and UK natural gas prices climbed to their highest level since late 2022 due to ongoing tensions in the Middle East and reports of an Iran-Oman agreement on managing shipping through the Strait of Hormuz.

According to LSEG data, markets are fully pricing in a 25-basis-point BoE rate increase by December and a second hike by March 2027.