The British Pound was little changed on Tuesday, remaining just above a two-month low against the US Dollar as traders assessed a report that Iran had offered to reopen the Strait of Hormuz within seven days.

The disruption to the key shipping route has tightened global oil supplies and created significant challenges for import-dependent economies such as the UK.

A sustained restoration of oil flows through the strait could ease pressure on the Bank of England to raise interest rates, potentially limiting further gains for Sterling.

Sterling was broadly flat at $1.3366, recovering after slipping to $1.3327 earlier in the session. Against the Euro, the Pound was down 0.06% at 85.76 pence.

The currency had initially rallied following an orderly political transition to Prime Minister Andy Burnham’s government, but has since come under pressure as investors reassess expectations for the pace and extent of Bank of England rate hikes.

“The bar to out-hawk broader market pricing appears to ‌us ⁠to be particularly high,” Goldman Sachs analysts stated.

The Bank of England kept interest rates unchanged at its latest meeting, although traders continue to price in at least one rate hike before the end of the year, according to LSEG data.

The BoE is increasingly out of step with other major central banks as inflation accelerates while it keeps rates on hold, leaving Sterling exposed to the risk of a further catch-up in monetary policy expectations, Reuters news agency reports.

Moreover, Brent crude futures fell below $100 a barrel and were on course for a fifth consecutive session of declines after Kyodo News reported that Tehran had offered to reopen the Strait of Hormuz within seven days if Washington took initial steps to ease military pressure.

However, previous diplomatic efforts to secure peace have made only limited progress, leaving investors cautious about the prospect of a lasting resolution.