FX.co ★ British Pound Weakens as Traders Await Starmer

The British pound fell to $1.32, nearing levels last seen in late March, as mounting political uncertainty in the UK weighed on investor sentiment. Speculation has intensified that Prime Minister Keir Starmer could soon announce his resignation, potentially clearing the way for a new leader. Media reports suggest Starmer is expected to set out a timetable for his departure on Monday and oversee an orderly transition of power to Andy Burnham, following the Greater Manchester mayor’s victory in last week’s by-election. However, such a move is not yet guaranteed. Markets are closely watching for further clarity on the political succession and any signals regarding the government’s future fiscal stance. On the monetary policy front, the Bank of England kept interest rates unchanged at 3.75% this month and maintained a cautious tone. The central bank also lowered its forecast for peak inflation in the fourth quarter of 2026 to 3.25%, down from a previous projection of 3.6%.