Sterling slipped below $1.345, retreating from Thursday’s two‑month high of $1.354, after Andy Burnham was formally confirmed as the new leader of the UK Labour Party following an uncontested leadership contest. Burnham succeeds Keir Starmer and is expected to become prime minister next week.
In his first speech as leader, Burnham said Labour was united and committed to putting political power “at the service of people,” and pledged to build on the foundations laid by Starmer. Market attention is now centred on his choice of Chancellor. Reports that Shabana Mahmood is the leading contender have reassured investors, tempering fears of a significantly more expansionary fiscal stance.
At the same time, intensifying tensions in the Middle East have driven oil prices to one‑month highs, heightening inflation risks and bolstering expectations that the Bank of England will maintain its tightening bias. Markets now fully price in a rate hike by year-end, with another increase anticipated by March 2027.
