Sterling slipped to 1.3201 against the US dollar on Monday after Keir Starmer confirmed his resignation as Prime Minister and Labour Party leader, setting up a leadership contest that markets are treating as secondary noise to geopolitical developments.
The FTSE 100 edged down just 0.03% by mid-morning, reflecting investors' greater preoccupation with US-Iran negotiations than with Westminster uncertainty, according to Andreas Lipkow, chief market analyst at CMC Markets, who said markets were "continuing to place greater weight on developments in US-Iran negotiations than on domestic political noise."
Greater Manchester Mayor Andy Burnham, boosted by a strong showing in the recent Makerfield by-election, is widely seen as the frontrunner to succeed Starmer, with nominations for the Labour leadership contest expected to open on 9 July.
Susannah Streeter at Wealth Club framed the transition as another chapter in a decade of political churn, noting that Burnham would be Britain's seventh Prime Minister in roughly ten years, a pace of turnover that, combined with Brexit, has "tarnished the UK's reputation as a stable place to do business."
Streeter characterised Burnham's interventionist economic approach as carrying both upside, through infrastructure spending and regional devolution, and risk, if activist policies deter private investment or lose credibility with bond markets.
