Pound holds near six-month high as BoE hike bets persist
The pound traded above $1.36 near its strongest level since mid-February as markets continued pricing Bank of England rate hikes, even as Brent crude fell on renewed Strait of Hormuz reopening talk.
The British pound traded above $1.36, near its strongest level since mid-February, as markets continued to price in Bank of England rate hikes this year despite easing oil prices, while remaining concerned over sticky inflation and rising government debt.
Brent crude fell for a third straight session after Iran held talks with Oman on reopening the Strait of Hormuz, with Oman’s foreign ministry saying a temporary corridor could be announced soon.
Unverified reports also suggested the US and Iran could reach a new ceasefire agreement in the coming days.
Markets continue to price at least 25 bps of BoE tightening by year-end, following data showing UK inflation accelerated to 2.9% in July, its highest level since March, with further increases expected toward year-end.
Attention will also turn to the government’s first budget under Andy Burnham in October.
On Tuesday, Britain unveiled plans to spend £10 billion on lower-cost housing for renters, with a focus on London.