United Kingdom: Sterling Weakens Further on Monday.

The British pound slipped to around $1.35, pressured mainly by a stronger dollar as investors moved toward safe-haven assets following renewed tensions between the US and Iran. Oil and gas prices surged after the US Navy seized an Iranian vessel, and Tehran responded by firing at ships and once again closing the Strait of Hormuz, reversing earlier hopes of reopening. Brent and WTI futures jumped about 6%, wiping out much of Friday’s decline. Traders have added roughly six basis points to expectations for Bank of England rate hikes this year, though only one increase remains fully priced in. Political uncertainty is also weighing on sentiment as scrutiny intensifies over Prime Minister Keir Starmer’s appointment of Peter Mandelson as US ambassador, with Starmer set to address parliament and further testimony expected from officials involved in the vetting process.