The British pound hovered around $1.34 after the Bank of England kept interest rates unchanged, amid a complex backdrop of persistent inflation, rising geopolitical tensions, and potential trade disruptions from proposed US tariffs. The decision, however, was not unanimous: six of the nine Monetary Policy Committee members voted to hold, while three favored a 25 basis point cut, defying market expectations of a 7–2 split. The Bank warned of “two-sided risks to inflation,” noting that price growth is likely to remain broadly stable through the rest of the year before easing back toward target in 2026. Meanwhile, the US dollar gained ground, supported by safe-haven flows amid the ongoing Israel-Iran conflict and the Federal Reserve’s decision to hold rates steady. Fed Chair Jerome Powell also flagged potential inflationary pressures ahead, partly stemming from new tariffs proposed by the Trump administration.
