The British pound fell to around $1.345, its lowest level since April 10, recording a 0.4% weekly decline against the US dollar, amid renewed market pessimism as US-Iran talks stall and the Strait of Hormuz remains effectively closed. Earlier optimism about a potential diplomatic resolution has faded following the end of a two-week ceasefire and the failure to schedule further negotiations. On the domestic front, UK retail sales rose by 0.7% month-on-month in March, surpassing expectations of a 0.2% increase. The surge was largely driven by motorists stocking up on petrol amid soaring prices linked to the conflict in Iran. Excluding petrol, retail sales grew by 0.2%. The stronger-than-expected data has heightened expectations that the Bank of England may raise interest rates in the near term, with investors now fully pricing in two quarter-point hikes in 2026 and assigning a 30% probability to a third increase by year-end.