The pound is under pressure this week — and it's all about oil.
GBP/USD has fallen to 1.3251, down from a January high of 1.3824. The driver isn't economic data. It's the US-Israel conflict with Iran and what it's doing to energy markets.
Since strikes began on 28 February, WTI crude has surged from ~$64 to nearly $100 per barrel. The Strait of Hormuz — the narrow corridor carrying 20% of the world's daily oil supply — has been severely disrupted.
The pounds being hit hard and it's showing:
🔴 UK inflation now expected to hit 3.5% by Q3
🔴 Bank of England rate cuts scrapped — hikes now on the table
🔴 Consumer confidence at near record lows
🔴 GDP growth running at just 0.1% per quarter
Markets are watching every diplomatic headline. On Wednesday oil fell on ceasefire hopes. By Thursday Iran rejected talks and oil jumped straight back above $100.
If you have a large international transfer coming up in the next few weeks — a property purchase, business payment or personal transfer — this volatility matters more than most people realise.
On a £250,000 transfer, a two-cent move in GBP/USD is worth around £5,000. That kind of move happened multiple times this week alone.