23.09.202609:13:04UTC+00Sterling Slips Amid Oil Price Fall, Weak PMI Data

The British pound slipped to around $1.33, its weakest level since late July, as investors assessed geopolitical tensions in the Middle East alongside softer-than-expected UK PMI data. At the same time, the US dollar remained underpinned by expectations of further policy tightening from the Federal Reserve.

Brent crude held below $100 a barrel, pressured by Saudi Arabia’s plans to restart a major pipeline and indications of progress in US–Iran negotiations. Even with the easing in oil prices, markets continued to anticipate further Bank of England tightening, with futures still assigning a strong probability to a 25-basis-point rate increase in November.

Preliminary September PMI figures indicated that UK private-sector activity continued to grow, though at a slower pace and slightly below consensus forecasts. Service-sector firms pointed to subdued domestic demand and heightened geopolitical uncertainty as key drags, partially offset by resilience in technology-related services. In manufacturing, ongoing investment in AI and increased defense spending remained important drivers of activity.