FX.co ★ Sterling Rises as Burnham Becomes UK Prime Minister

Sterling rose to $1.347 after Andy Burnham officially became UK Prime Minister on Monday, having accepted King Charles III’s invitation to form a government. Burnham, who ran unopposed in the Labour leadership contest following Keir Starmer’s resignation, is the seventh prime minister in a decade and the second since Labour returned to power in 2024. Market attention is now centred on his choice of Chancellor. Reports that Shabana Mahmood is the frontrunner have reassured investors, easing fears that the new government might pursue a more expansionary fiscal policy. At the same time, rising tensions in the Middle East have driven oil prices to their highest level in more than a month, adding to inflationary pressures and reinforcing expectations that the Bank of England will keep interest rates elevated for longer.