Pound Climbs to Three-Week High on BoE Rate Hike Bets

2026-07-09 08:56 By Joana Ferreira 1 min. read

The pound rose back above $1.34, its strongest level since mid-June, as investors increased bets on Bank of England interest rate hikes amid escalating tensions between the US and Iran.

Investors also weighed the latest remarks by US President Donald Trump, who stated that Iran still wants to make a deal "badly." Crude prices reached two-week highs on Wednesday after fresh US strikes in Iran, with Trump declaring the Iran ceasefire over, raising doubts about the peace deal’s stability and heightening inflationary pressures.

Investors now fully price in a 25-basis-point BoE rate hike by year-end, most likely in December.

Politically, Andy Burnham, the frontrunner to succeed Keir Starmer as prime minister, has yet to name a finance minister, with former energy minister Ed Miliband emerging as the likely choice.

Sterling’s resilience amid recent political turmoil suggests much of the negative news has already been priced in.



News Stream
Pound Climbs to Three-Week High on BoE Rate Hike Bets
The pound rose back above $1.34, its strongest level since mid-June, as investors increased bets on Bank of England interest rate hikes amid escalating tensions between the US and Iran. Investors also weighed the latest remarks by US President Donald Trump, who stated that Iran still wants to make a deal "badly." Crude prices reached two-week highs on Wednesday after fresh US strikes in Iran, with Trump declaring the Iran ceasefire over, raising doubts about the peace deal’s stability and heightening inflationary pressures. Investors now fully price in a 25-basis-point BoE rate hike by year-end, most likely in December. Politically, Andy Burnham, the frontrunner to succeed Keir Starmer as prime minister, has yet to name a finance minister, with former energy minister Ed Miliband emerging as the likely choice. Sterling’s resilience amid recent political turmoil suggests much of the negative news has already been priced in.
2026-07-09
Pound Slips as Oil Surge Weighs on UK Outlook
The pound eased back to $1.335, retreating from a three-week high, as rising oil prices stoked inflation concerns and boosted bets on Bank of England rate hikes, darkening the UK’s economic outlook. Brent crude climbed to a two-week high after fresh US strikes in Iran, raising doubts over the peace deal’s stability and intensifying inflationary pressures. US President Trump heightened tensions by declaring at NATO’s Ankara summit that, as far as he is concerned, the Iran ceasefire is over. Investors now fully price in a 25-basis-point BoE rate hike by year-end, up from a 75% probability before Trump’s remarks. Politically, Andy Burnham, the frontrunner to replace Keir Starmer as prime minister, has yet to appoint a finance minister, with former energy minister Ed Miliband emerging as the likely pick. Sterling’s resilience amid recent political turmoil suggests much of the negative news has already been factored in.
2026-07-08
Pound Nears Three-Week High
The pound traded just shy of $1.34, near its strongest level since June 16, and reached a fresh one-year high against the euro as investors ramped up bets on Bank of England rate hikes. Rising oil prices, with crude above $73 per barrel after Strait of Hormuz attacks, and inflation concerns drove the shift, with markets pricing in a 76% chance of a hike by year-end and over 50% odds for November. Bank of England Governor Andrew Bailey recently reiterated that inflation remains on track to hit 2%, though later than previously forecast, and ruled out near-term rate cuts. Politically, Andy Burnham, the frontrunner to succeed Keir Starmer as prime minister, has yet to name a finance minister, with former energy minister Ed Miliband seen as the likely choice. Sterling’s resilience amid recent political turmoil suggests much of the negative news has already been priced in.
2026-07-07