FX.co ★ Sterling Slides as Middle East Tensions Rattle Markets

The British pound slipped toward $1.33 as risk aversion spiked amid persistent US–Iran tensions. President Trump asserted that Iran wants a deal but "fears admitting it," while Iranian state media dismissed the prospect of talks, instead demanding unilateral guarantees, including the possibility of levying fees on ships transiting the Strait of Hormuz. Oil prices surged, with Brent crude approaching $105 per barrel and on track for its largest monthly gain since 1990. In the UK, consumer confidence plunged in March to record lows as the conflict intensified concerns over inflation. Markets are now pricing in two to three Bank of England rate hikes, with a 70% probability of a move next month and a second increase fully priced in by July.