The British pound was steady against the dollar on Thursday as broader currency markets focused on developments in the Iran war.
Traders digested some worse-than-expected surveys of British business activity.
Sterling was flat at $1.3437. Against the euro, the pound was 0.13% higher at 86.42.
A survey on Thursday showed British companies suffering their most widespread drop in activity in over a year due to the economic fallout from the Iran war and political uncertainty at home.
S&P Global's preliminary UK Composite Purchasing Managers' Index for May tumbled to 48.5, from 52.6 in April, its first sub-50.0 reading since April 2025 and far below the 51.6 median in a Reuters poll.
The figure overshadowed recent positive data, including strong Q1 GDP figures last week and inflation figures on Wednesday.
April's CPI showed inflation at 2.8%, down from 3.3% in March.
"It's a case of what might have been for the UK," said Henry Cook, senior economist at MUFG Bank.
He highlighted the closure of the Strait of Hormuz, which has choked oil flows and led to surging energy prices, upending central bank expectations.
The Bank of England kept rates on hold in April and assessed the impacts of the US-Israeli war on Iran.
