Sterling is poised to extend its gains against major currencies as the UK’s relatively high interest rates continue to attract foreign investment, UBS strategists said. The bank’s bullish view is supported by the yield advantage of pound-denominated assets over those in the eurozone and the United States, although earlier-than-expected Bank of England rate cuts could narrow the differential and weaken the currency. UK consumer-price inflation held at 2.2% in August, while core inflation remained at 3.6% and services inflation at 5.6%, keeping domestic price pressures above levels consistent with the BoE’s 2% target. Sterling rose 0.4% to $1.3170 in early London trading, while the euro fell 0.2% to 84.3 pence and the 10-year gilt yield edged up to 3.95%. Markets price roughly a 50% chance of a quarter-point BoE cut in November after the central bank reduced rates in August for the first time in four years, while the Federal Reserve is widely expected to cut rates next week. UBS says investors should monitor UK inflation and central-bank communications for signs that the yield advantage is fading. A stronger pound can reduce import costs and increase purchasing power abroad, but may make UK exports less competitive, squeeze exporters’ margins and weigh on economic growth.