2026.03.2508:31:29UTC+00Pound Steady as Middle East Tensions Ease and UK Inflation Holds

The British pound held steady near $1.34, supported by hopes of de-escalation in the Middle East. Reports indicated that Washington had proposed a 15-point peace plan to Tehran, following the prospect of a one-month ceasefire. Iran, however, denied any role in talks and asserted that “no one can trust US diplomacy.”

In the UK, February inflation data showed headline consumer prices unchanged at 3%, in line with expectations, while core CPI inched up to 3.2%, slightly above the 3.1% forecast. As the data predates the latest Middle East tensions, it had little impact on markets.

Investors now expect fewer than two interest rate increases by the end of the year, with roughly 68 basis points of tightening priced in for December, down from nearly 75 basis points earlier in the week. The shift reflects easing oil prices, which have tempered concerns about renewed inflation pressures from higher energy costs.