LONDON, April 24 (Reuters) - The British pound rose

slightly against the dollar on Friday but was headed for a

weekly loss, as traders kept an eye on stalled peace

negotiations between the U.S. and Iran while some strong UK

retail data barely moved the needle.

Sterling was 0.1% higher versus the dollar at $1.348, as

broader currency markets traded largely range-bound.

Against the euro, the pound fell 0.1% to 86.69.

UK retail sales for March rose more than expected, official

data showed. British motorists worried about fuel price

increases rushed to the pumps immediately after the start of the

Iran war, pushing up total sales volumes for the country's

retail sector.

"There had been concerns that the uncertainty over the

impact of the situation in the Middle East on household finances

might dampen consumers' appetite to spend, but even the figures

for March were fairly robust," Investec economists wrote in a

note.

However the data comes hot on the heels of a survey that on

Thursday showed British consumer morale slid this month to its

lowest since October 2023 as households ramped up their

expectations for price rises.

The war in the Middle East has caused a global energy price

spike, fanning concern around inflation and growth.

Traders are betting on at least one 25-basis-point rate

increase from the Bank of England this year, a marked reversal

from before the war when they had been eyeing two.

The BoE will deliver its next policy decision on Thursday,

with markets placing an 83% bet that the central bank will hold

rates at 3.75%.

The pound shed 1.9% in March as the Middle East conflict

weighed on markets with the closure of the Strait of Hormuz -

critical for the flow of energy - dealing a blow to the outlook

for the British economy.

It has now recouped the losses in April and is on track for

its biggest monthly rise since August.

Elsewhere, the BoE expects stock markets around the world to

fall because current share prices do not fully reflect the many

risks facing the global economy, Deputy Governor Sarah Breeden

said in an interview with the BBC on Friday.