The pound slipped to $1.34 as Middle East tensions flared, with renewed US-Iran conflict driving oil prices up and exposing the fragility of recent peace efforts. Brent crude rose to nearly $97 a barrel after the US conducted airstrikes on an Iranian military site and imposed sanctions to block Iran’s revenue from ships in the Strait of Hormuz. A US official described the strikes as defensive and reaffirmed the country’s commitment to the month-old ceasefire. At the same time, Kuwait reported countering hostile drone and missile threats. The heightened tensions in the region prompted traders to boost bets on Bank of England rate hikes, despite a series of recent weak data releases pointing to sluggish economic activity in the UK.