How can the Bank of England influence the value of the pound?

The Bank of England can influence the value of the pound primarily by changing interest rates to attract foreign savings. When the Bank raises interest rates, it typically offers higher returns on savings held in pounds, making it more attractive for foreign investors to put their money into the UK economy. This increase in demand for pounds, as investors convert their foreign currencies to pounds to take advantage of the higher interest rates, can lead to an appreciation of the pound's value.

Conversely, if the Bank of England lowers interest rates, the returns on savings in pounds decrease, which may result in a decrease in demand for the pound as foreign investors look for better returns elsewhere. Thus, interest rates play a crucial role in determining capital flows into or out of the UK, consequently affecting the currency's value.

The other choices do not directly impact the value of the pound in the same clear and immediate way. For instance, altering supply chains for exporters primarily relates to the efficiency of businesses rather than direct currency valuation. Regulation of commodity prices does not necessarily influence the exchange rate directly but can affect inflation rates and economic activity. Direct investment in foreign markets, while a strategic move for the Bank, typically does not influence the pound's value as significantly or directly as managing interest rates does.