See more This is Money on Google - save us as a Preferred SourceBy DAILY MAIL REPORTER Updated: 12:37 BST, 12 July 2026
The pound rallied against the dollar and the euro on Friday as renewed hostilities with Iran fuelled fears interest rates will be raised to combat inflation.Sterling rose to $1.3451 against the US dollar – its highest since June 15 – and €1.1752 against the single currency, a level last seen in June last year.The rally came as investors ramped up bets that the Bank of England will be forced to raise interest rates this year to keep inflation under control. Hikes inbound? Huw Pill said on Thursday that rates would rise if they need to this yearThe price of oil has jumped from about $71 a barrel early this week to more than $80 on Wednesday after Donald Trump said his peace deal with Iran was 'over' and military strikes resumed. Brent crude stood at $76 on Friday.Huw Pill, the Bank's chief economist, this week said interest rates are likely to rise to keep inflation in check. Asked by the BBC on Thursday if rates would need to rise in the coming year, he said: 'The short answer is yes.'
