The British pound (GBP) remained broadly stable against the U.S. dollar (USD) on Monday, reflecting heightened caution among investors ahead of the Bank of England’s (BoE) upcoming policy meeting. The market’s subdued tone comes against a backdrop of geopolitical instability, as tensions between Israel and Iran persist, prompting safe-haven flows into the greenback.

The British pound is experiencing a remarkable climb against the US dollar, posting a nine-day rally with a 4.5% increase. This dramatic rise has captured the attention of not only traders but also economists analyzing the current economic landscape in the UK and the impact of external factors.

In March, UK inflationary pressures eased significantly, with annual price growth slowing to 2.6%—the lowest level since December. According to the Office for National Statistics (ONS), inflation not only surprised on the downside (economists had predicted 2.7%), but also reflected the impact of recent policy measures undertaken by the Bank of England.

In recent weeks, the attention of financial analysts and investors has been focused on the actions of the Bank of England. Mark Nash, an investment director at Jupiter Asset Management, has made a bold bet that the central bank will lower interest rates in the near future. This strategic position could significantly impact the bond market and the economic situation in the United Kingdom.