FX.co ★ Sterling Rebounds from Three-Month Lows

Sterling rebounded from three-month lows to trade around $1.324, supported by easing oil prices and a stabilization in global bond markets that improved risk appetite. The move came as investors also assessed hawkish comments from senior Bank of England officials. Brent crude fell after US President Donald Trump ruled out attacking Iran before the November midterm elections, citing productive talks aimed at ending the conflict. At the same time, BoE Chief Economist Huw Pill underlined the need to keep inflation in check, while MPC member Megan Greene cautioned that UK wage growth could reach about 3.5% in 2027, potentially sustaining inflationary pressures and reinforcing the case for additional rate hikes. Governor Andrew Bailey likewise reiterated the priority of bringing inflation down. Markets are currently pricing in a BoE rate increase in November, with the Bank remaining the only major central bank yet to start tightening monetary policy in response to inflationary pressures linked to the US-Iran war.