2026.04.1409:15:26UTC+00Sterling Surges Past $1.35 on Middle East Talk Hopes

The British pound climbed above $1.35, its highest level since before the late-February outbreak of war, as investors positioned for potential Middle East peace talks despite the US maintaining its blockade on Iranian ports. With US and Iranian delegations expected to possibly resume negotiations in Islamabad this week, after their latest round ended without progress, risk appetite improved and pushed oil prices below $100 per barrel. However, inflationary pressures from elevated energy costs are likely to endure as long as the Strait of Hormuz remains closed, prompting markets to anticipate a more hawkish stance from the Bank of England. Traders are now pricing in nearly two interest rate increases by the end of the year. Domestically, UK like-for-like retail sales rose 3.1% in March, driven by a 6.2% jump in food sales as consumers stocked up ahead of the Easter holiday.