Sterling Slips Amid Oil Price Fall, Weak PMI Data

2026-09-23 09:13 By Joana Ferreira 1 min. read

The British pound weakened to around $1.33, its lowest level since late July, as investors weighed Middle East developments and weaker-than-expected UK PMI data, while the US dollar remained supported by expectations of further Federal Reserve tightening.

Brent crude stayed below $100 a barrel amid Saudi Arabia’s plans to restart a key pipeline and signs of progress in US-Iran talks.

Despite softer oil prices, expectations for further Bank of England tightening remained firm, with markets still pricing a solid chance of a 25-basis-point rate hike in November.

Meanwhile, preliminary September PMI data showed UK private-sector activity continued to expand, although growth slowed and fell slightly short of expectations.

Services firms cited subdued domestic demand and geopolitical uncertainty as headwinds, while technology services provided support.

In manufacturing, AI investment and higher defense spending continued to boost activity.



News Stream
Sterling Slips Amid Oil Price Fall, Weak PMI Data
The British pound weakened to around $1.33, its lowest level since late July, as investors weighed Middle East developments and weaker-than-expected UK PMI data, while the US dollar remained supported by expectations of further Federal Reserve tightening. Brent crude stayed below $100 a barrel amid Saudi Arabia’s plans to restart a key pipeline and signs of progress in US-Iran talks. Despite softer oil prices, expectations for further Bank of England tightening remained firm, with markets still pricing a solid chance of a 25-basis-point rate hike in November. Meanwhile, preliminary September PMI data showed UK private-sector activity continued to expand, although growth slowed and fell slightly short of expectations. Services firms cited subdued domestic demand and geopolitical uncertainty as headwinds, while technology services provided support. In manufacturing, AI investment and higher defense spending continued to boost activity.
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Sterling Weakens to Near Two-Month Low
Sterling weakened to $1.336, near its lowest level since late July, as investors assessed the latest developments in the Middle East alongside weaker-than-expected UK public finances. The US dollar remained supported by expectations of further interest-rate hikes from the Federal Reserve. Brent crude resumed its recent decline after reports that Iran had proposed reopening the Strait of Hormuz within seven days if Washington agrees to demands including lifting its military blockade of Iranian ports. Meanwhile, UK government data showed the budget deficit widened to £18.3 billion in August, above the £15.5 billion forecast, partly reflecting higher inflation-linked spending on pensions and benefits. Attention is now turning to next month’s Autumn Budget, with the government reportedly considering changes to its fiscal rules that would allow borrowing for infrastructure projects to be excluded.
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Sterling Slips as Oil Rises and UK Deficit Widens
Sterling weakened to $1.336, near its lowest level since late July, as higher oil prices and weaker-than-expected UK public finances weighed on sentiment. At the same time, the US dollar remained supported by expectations of further interest-rate hikes from the Federal Reserve. Brent crude climbed towards $102 a barrel, on track to end a four-day losing streak, amid uncertainty over oil flows and potential Middle East diplomacy. President Donald Trump is due to address the UN General Assembly later today and could meet his Iranian counterpart on the sidelines. UK government data showed the budget deficit widened to £18.3 billion in August, above the £15.5 billion forecast, partly reflecting higher inflation-linked spending on pensions and benefits. Attention is now turning to next month’s Autumn Budget, with the government reportedly considering excluding infrastructure borrowing from its fiscal rules.
2026-09-22