Pound Plunges Amid Oil Price Spike and Interest Rate Fears

The British pound has hit a one-month low against the US dollar due to rising oil prices and speculation about interest rate hikes. The pound fell by 0.2% to $1.347, its weakest since August 7.

The sharp increase in crude oil prices is largely attributed to supply disruptions following Yemen's Houthi forces' attacks on Saudi Arabia. Oil prices surged over 2% to $108.2 per barrel, with investors concerned about prolonged damage to energy infrastructure and transport routes.

As a net oil importer, the UK is vulnerable to high energy prices, which have led to global energy inflation worries. Investors are bracing for rate hikes, particularly in the US, where the Federal Reserve is likely to raise interest rates soon. The European Central Bank has already increased borrowing costs recently.