Geopolitical tensions between Iran, the US, and Israel pushed the British pound sharply lower, hitting $1.33, while UK equities opened weaker. Analysts at Jefferies warned of further downside ahead, citing market complacency about risks. The pound fell about 1% against the dollar, and the FTSE 100 index dropped 0.7% as of 0814 GMT.

This follows US President Trump signaling openness to talks with Iran and a senior Iranian official stating Tehran is not ready to negotiate with Washington. Markets are expected to remain volatile, driven by these developments and the lack of immediate resolution. £1.33 represents the pound's lowest level against the dollar in recent months, a key figure for investors tracking currency risk. 0.7% decline in the FTSE 100 underscores the immediate market reaction to geopolitical uncertainty.