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19.03.202612:15:15UTC+00Sterling Tops $1.33 as BoE’s Hawkish Hold Reshapes Rate Outlook

The British pound climbed above $1.33 after the Bank of England unanimously left interest rates unchanged at 3.75%, while delivering a more hawkish message than markets had anticipated. Investors had expected a 7–2 split in favor of holding rates, but policymakers cautioned that the Middle East conflict’s impact on already surging energy and commodity prices could drive near-term inflation higher, potentially reversing the recent disinflation in domestic prices and wages. Traders now fully price in two additional BoE rate hikes this year, as European gas prices jump following attacks on Qatar’s LNG facilities and Brent crude rises to $117 per barrel, intensifying UK inflation risks. On the data front, the latest UK labor market report showed wage growth slowing and unemployment stuck at 5.2%, with both figures coming in weaker than forecast.

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