The pound held above $1.32, rebounding from a recent seven-month low, after Andy Burnham — the sole candidate to succeed Keir Starmer — pledged to significantly devolve fiscal powers from Westminster to local authorities if elected, while retaining a commitment to fiscal discipline. In his first major speech since winning a Commons seat, Burnham condemned what he described as the UK’s “stark imbalance” between national and local government resources, arguing that it is constraining economic growth.
He declined, however, to discuss potential ministerial appointments, saying he would reveal his choices only after the Labour leadership contest has concluded. Sterling is still down more than 1.5% against the US dollar so far this month, weighed down by political uncertainty, a stronger greenback, and shifting interest-rate expectations following the US–Iran ceasefire. With the Strait of Hormuz reopened, oil prices and inflation projections have eased, reducing expectations of further Bank of England rate hikes, while the US Federal Reserve’s hawkish stance continues to underpin forecasts for additional US rate increases.
