The British pound climbed above $1.35 on Friday, recovering from two-week lows as investors awaited U.S. employment data and assessed signals from the Bank of England and Federal Reserve. Bank of England Chief Economist Huw Pill said raising rates now could reduce the risk of a sharper tightening later to contain inflation, which has risen amid the fallout from the Iran war. Markets fully price a BoE rate increase by year-end and expect another by March 2027. Federal Reserve Governor Christopher Waller said recent data indicated disinflation (slowing inflation) and that he would favor leaving rates unchanged at this month’s meeting if upcoming figures confirmed the trend. Futures subsequently reduced the implied probability of a Fed hike this month to roughly 50%, from about 63% a day earlier.