The British economy stalled in January, with GDP showing no growth for the month and only a modest 0.2% increase over the prior quarter, falling short of expectations. The stagnant services sector weighed heavily on growth, causing sterling to weaken against the US dollar. Investors are increasingly concerned about the UK’s exposure to economic fallout from the Iran conflict, given its fragile public finances and reliance on imported gas. Rising oil prices, with Brent crude back near $100 a barrel, add to inflation pressures. Despite weak growth data, markets now anticipate a high likelihood of a Bank of England rate hike by year-end. Continued energy price shocks could further dampen growth, making GBP/USD sensitive to evolving geopolitical and inflation dynamics.