The British pound held above $1.345 as investors monitored the outcome of Iran-Oman talks and their implications for restoring energy flows through the Strait of Hormuz. Iran announced it had reached an agreement with Oman on a proposed shipping route through the strategic waterway, raising hopes of improved oil supply and lower energy prices. However, the prospect of a broader US-Iran deal remains unclear, with President Donald Trump saying he would “see what happens” in the ongoing negotiations.
Expectations of lower energy costs have eased worries about inflation and a slowdown in economic growth, reinforcing the view that the Bank of England will stick to a gradual path for monetary policy. That outlook was supported by last week’s Bank of England meeting, where policymakers kept interest rates unchanged and Governor Andrew Bailey played down the need for further tightening, arguing that the disinflation process remains on track despite lingering external uncertainties.
