United Kingdom: Sterling Recovers Above $1.35 as Markets Eye Data.

The pound steadied above $1.35, bouncing back from two-week lows, as investors await a packed week of economic data and global rate decisions while tracking US-Iran peace talks. The Bank of England is widely expected to hold rates at 3.75% amid the Middle East crisis, with analysts anticipating a near-unanimous or strong majority vote to maintain the status quo. This follows March’s UK inflation report last week, which showed CPI at 3.3% year-over-year, fueled by surging fuel prices, leading markets to price in at least two rate hikes this year, up from one, with a possible third. Adding to the economic pressures, oil prices have surged as the Strait of Hormuz remains blocked and US-Iran negotiations stalled. Political uncertainty is also rising ahead of the May 7 local elections, with Prime Minister Keir Starmer facing criticism over his appointment of Peter Mandelson as US Ambassador.