Highest value against US dollar in a year for British Pound

The pound sterling reached its highest level against the US dollar in a year as investors bet on UK interest rates staying higher for longer. Inflation was proving more stubborn than expected, prompting traders to cut bets on an August rate cut. The British pound also benefited from hopes of economic stability under the new government. The UK inflation rate remained steady at the Bank of England‘s 2% target, but underlying measures like services inflation at 5.7% and core inflation at 3.5% remained high. While other central banks have cut rates, the Bank of England and the US Federal Reserve have yet to do so. The IMF raised its UK growth forecast to 0.7% but warned that inflation persistence might mean higher rates for longer.