The British pound slipped below $1.32, approaching a seven-month low as markets weighed easing political uncertainty against deteriorating economic data. Political risk retreated after Keir Starmer announced his resignation, reducing the likelihood of a prolonged Labour leadership contest. Andy Burnham has emerged as the frontrunner to succeed him, and support from former health secretary Wes Streeting has further lowered the risk of a drawn-out race.
On the economic side, the flash PMI for June painted a weaker picture: the composite index fell to 49.4, a 14-month low and below expectations, pointing to a second consecutive month of contraction. Rising input costs and faster services inflation continue to complicate the Bank of England’s policy outlook.
