LONDON, June 23 (Reuters) - The pound fell against the

dollar on Monday with the greenback benefiting from safe-haven

demand as investors assessed the risk of an Iranian response to

U.S. attacks on its nuclear sites.

By 1054 GMT the pound was down 0.5% versus the dollar at

$1.33795, its lowest level since May 20.

British Prime Minister Keir Starmer spoke to U.S. President

Donald Trump on Sunday, his office said. Starmer also urged Iran

to return to the negotiating table.

Market focus is firmly on the price of oil, which earlier

spiked as much as 5.7% and was last up 0.5%.

"Ultimately the pound is exposed...Pro-cyclical currencies

have a negative sensitivity to oil prices," said Francesco

Pesole, FX strategist at ING.

Elsewhere, UK flash PMIs hit screens showing business

activity expanded modestly in June, but the data barely moved

the needle on the pound.

The S&P Global UK Composite Purchasing Managers' Index rose

to 50.7 from 50.3 in May - edging further above the 50.0 growth

threshold.

"Overall, the PMIs suggest that the biggest hit to the

economy was in April and things are now starting to recover.

That said, the subdued level of the PMIs is still pointing to

near stagnation," Thomas Pugh, chief economist at RSM UK, wrote

in a note.

The Bank of England held interest rates at 4.25% last

Thursday as expected but flagged a weaker labour market and the

risk of higher energy prices as conflict in the Middle East

escalated.

Despite the hold, market watchers took a doveish hint from

the 6-3 vote split in favour of keeping rates on hold, with

three MPC members in favour of a cut, a factor that is still

playing a role according to ING's Pesole.

"Markets are still tending towards the doveish side for the

pound curve," he said.

As of Monday, 58% of traders were betting on a 25-bps rate

cut at the BoE's next session in August, with 42% betting on no

change.