The pound ended July just above $1.34, gaining more than 1% against the US dollar as investors reassessed the Bank of England's latest policy decision and welcomed easing political uncertainty following the appointment of the UK's seventh prime minister in a decade. The new government also pledged to maintain fiscal discipline, supporting investor confidence. The BoE voted 6-3 to leave interest rates unchanged, with three policymakers backing a rate hike versus expectations for a 7-2 split. However, Governor Andrew Bailey downplayed expectations of an imminent tightening cycle, saying the disinflation process remains on track, while some officials suggested rate cuts could return to the agenda if the Iran conflict subsides. Markets now price in just one BoE rate hike by year-end. In the US, the Federal Reserve kept interest rates unchanged this week, with investors expecting two rate hikes by June next year as renewed US-Iran hostilities continue to cloud the economic outlook.