Sterling was muted against the dollar on Monday ahead of a Bank of England meeting this week, with markets adopting a wait-and-see approach to rising geopolitical uncertainty, as a conflict between Israel and Iran showed no sign of abating.

Iran has threatened to target UK, French and US military bases across the Middle East if the help block the Iranian missile and drone retaliation for Israel’s attack.Both countries have exchanged extensive aerial attacks after Israel launched a surprise missile assault on some of Tehran’s nuclear facilities,

The president had opposed Israeli action against Iran but came to believe that Israel had reason to act and that the U.S. would have to lend some support.

Gold rose to a near two-month high on Monday, as intensified clashes between Israel and Iran over the weekend stoked fears of a broader regional conflict, pushing investors towards safe-haven assets.

The UK sent jets and air tankers amid fears Iran will blockade Strait of Hormuz and spark massive oil price hikes.

Some oil tanker owners and managers have paused offering their vessels for Middle Eastern routes since Friday as they assess the risks from Israel’s conflict with Iran, fueling concerns over export flows from the region.

German Chancellor Friedrich Merz said on Sunday he hoped an upcoming meeting of the Group of Seven countries would show unity and could reach agreement on four key points to help resolve the conflict between Israel and Iran.

Jon Faust, who advised three Fed chairs, doesn’t see an interest-rate cut until December — an even then, the odds of a move are just 50/50.