The British pound weakened further to $1.34 on Thursday, its lowest level in over a month, after a series of high-profile resignations signaled an intensifying contest for the prime minister’s post. MP Josh Simons stepped down to allow Manchester mayor Andy Burnham to run for parliament, while Health Secretary Wes Streeting resigned to position himself as a candidate for prime minister. Both are challenging incumbent Keir Starmer, who is under growing pressure to resign after the ruling Labour Party suffered significant losses in last week’s local elections. Another potential contender, Angela Rayner, was cleared by HMRC in a tax investigation this morning, potentially removing a key obstacle to her entering the race.
Investors also weighed remarks from the Bank of England’s Sarah Breeden, who said the conflict in the Middle East is “much less likely” to trigger an inflation spike comparable to that of 2022. Meanwhile, the UK economy grew by 0.6% in Q1 2026, with annual growth coming in at a stronger-than-expected 1.1%, supported by an unexpected 0.3% expansion in March.
