The pound traded around $1.345, close to its strongest level in nearly two weeks, and was heading for a monthly gain of more than 1% against the dollar, its best monthly performance since April. Sterling was supported by investors reassessing the Bank of England’s July decision and by fading political uncertainty in the UK, as the country welcomed its seventh prime minister in a decade, with the new government pledging to adhere to fiscal rules. The BoE voted 6-3 to keep interest rates unchanged, with three policymakers favoring a rate hike compared with expectations for a 7-2 split. However, Governor Andrew Bailey pushed back against speculation of an imminent tightening cycle, saying the disinflation process remains intact, while some officials noted rate cuts could return to focus if the Iran conflict ends. Markets are now pricing in just one rate hike by the end of the year, while renewed US-Iran hostilities continue to add uncertainty to the economic outlook.