Pound PLUMMETS to lowest level this year as US-Iran war and ‘disappointing’ GDP hits economy
The value British pound has plummeted to its lowest level this year, falling to $1.32 earlier today, having dropped for four consecutive days this week.
This represents sterling’s lowest value since December 2025, with the rate at the foreign exchange coming in just below $1.30 on average.
Today’s latest drop is primarily due to the ongoing US-Iran war, which has seen a spike in oil prices, and “disappointing” gross domestic product (GDP) growth for January 2026.
According to figures from the Office for National Statistics (ONS), the UK economy has no growth over the period in a major blow to Chancellor Rachel Reeves’s fiscal plans.
The pound has dropped in value in response to the ongoing crisis
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GETTY / ECONOMY
Kevin Brown, a savings expert at Scottish Friendly, shared: “Despite some encouraging data recently, today’s GDP reading is disappointing and shows the UK economy is struggling to build momentum in the face of numerous headwinds.
“Recent reports of rising output and business confidence had perhaps raised hopes that the economy was starting to turn the corner. Instead, the data suggest that growth remains patchy and inconsistent.
“A major economic drag remains consumer confidence, or the lack thereof, with households grappling with elevated interest rates and nearly five years of higher inflation. This is a real concern for an economy that relies so heavily on consumption.”
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Rachel Reeves | RACHEL REEVES / LINKEDIN 