The British pound held above $1.34 as markets weighed geopolitical risks surrounding US–Iran negotiations, including tensions over Iran’s uranium program and efforts to secure a ceasefire in Lebanon. US President Donald Trump signaled that Washington might take unilateral action on Iran’s nuclear activities, while clashes between Lebanese and Israeli forces continued despite the prospect of a US-brokered truce.
On the domestic political front, Greater Manchester Mayor Andy Burnham publicly confirmed for the first time that he intends to challenge Keir Starmer for the premiership. Starmer moved quickly to dismiss any suggestion he might step aside, insisting he has no plans to resign. Burnham’s leadership ambitions depend on the outcome of the Makerfield by-election on June 18; a victory there would give him a seat in Parliament and make him formally eligible to contest the Labour leadership.
In monetary policy, markets are currently pricing in just under two Bank of England rate increases this year, with the first widely expected in September. Policymakers face the task of containing rising inflation while also responding to early signs that the labour market is beginning to cool.
