Houthi forces attacked Saudi Arabia from Iraqi territory with help from Iranian-backed Iraqi militias, potentially opening a new front in the region's war. The escalation lands alongside fresh US airstrikes on Iran and a Bank of England warning that it could raise interest rates if the conflict keeps widening.
Houthi forces attacked Saudi Arabia from Iraqi territory with the help of Iranian-backed Iraqi militias, potentially opening a new front in the region's war. The attack came as the US military struck Iranian targets in a widening campaign. Bitcoin dropped 1-3% as traders sold risk assets. The Bank of England has also warned it could raise interest rates if the conflict keeps escalating.
Houthis strike from Iraqi soil
A report from the region says Houthi forces used Iraqi territory, aided by Iranian-backed Iraqi militias, to launch the strike on Saudi Arabia. Saudi Arabia has intercepted drones and missiles fired by Houthi forces and struck back at militia targets inside Iraq in the run-up to the attack. Prediction markets now price a 35.5% chance that Iran takes military action against a Gulf state by July 31. The use of Iraqi territory could point to a broader regional conflict involving multiple actors.
US strikes Iran again, Bitcoin slides
The US military hit sites linked to the Islamic Revolutionary Guard Corps in southern Iran at approximately 10 p.m. ET on July 29, striking locations around Bandar Abbas, Kish Island and Qeshm Island. The strikes follow President Trump's promise to hit Iran hard, in a conflict that traces back to joint US-Israel operations launched on February 28, 2026. Bitcoin dropped 1-3% as traders shifted into risk-off mode, echoing the pattern from the June 2025 strikes. Bitcoin fell from roughly $107K to $103K during that earlier round of strikes.
Bitcoin's reaction fits a broader risk-off pattern: it behaves more like a high-beta risk asset that sells off when geopolitical risk rises, while gold has rallied during the crisis.
Bank of England holds rates, weighs Iran risk
The Bank of England kept interest rates unchanged at 3.75% for a fifth meeting in a row, but signaled it is ready to raise them if the war escalates further. Three of the nine members on its rate-setting committee voted for a hike, one more than at the previous meeting. The Bank of England is watching inflation risk closely as the conflict threatens to keep energy costs elevated.
Oil fell Monday after Trump signaled progress in talks with Tehran, then surged past $91 a barrel on Wednesday after Trump said: "We'll be hitting them hard. They're going to get a beating." UK inflation eased to 2.6% in the year to June. The Bank now expects the economy to grow 1.1% this year, above its earlier forecast.
Bailey said the Bank is not currently moving toward a rate hike, though that judgment changes day to day depending on how the US and Iran respond.
Sources: Crypto Briefing, Crypto Briefing, BBC News
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