The British pound traded just above $1.32, attempting to rebound from a recent sharp slide that sent sterling to its weakest level in three months. Investors are closely monitoring ongoing tensions in the Middle East and the potential impact on the Bank of England’s policy outlook ahead of this week’s decision. Israeli officials warned the war could last “several more long weeks,” while US President Donald Trump said Iran is “not ready” to reach a deal. The spike in energy prices has prompted traders to adjust their expectations for interest rates, with markets now pricing in roughly 23 basis points of a hike for December, just shy of a quarter-point increase. This marks a sharp reversal from early March, when investors were expecting the BOE to cut rates twice this year. For the March meeting, attention will focus on the vote split, with a 7-2 or 6-3 decision to hold rates seen as the most likely outcome.