Pound Slips as UK PM Starmer Resigns, Political Turmoil Weighs

British Pound weakens further as PM Starmer resigns, political uncertainty weighs on investor sentiment

London, June 22

In the opening session of the UK forex market, the pound sterling weakened to 1.32 against the US dollar at the time of filing this report.

The UK currency has weakened by more than 1.65 per cent against the dollar over the last five days amid ongoing political uncertainty and a stronger US dollar.

Currency expert K N Dey told ANI that the weakness in the pound was being driven by both global currency movements and developments in the UK political landscape.

"First of all, the dollar index is above 101. In fact, the dollar index went up last week, which has made the other currencies to come down. So sterling also has come down. And second thing is that there is a political uncertainty in UK. That is also adding a little bit of negativity on the sterling. So sterling is rather down more than the required," Dey said.

He added that the pound could continue to remain under pressure until clarity emerges on the political situation in the country.

"And going forward, until and unless this political uncertainty in UK gets settled, the sterling will have pressures going ahead," he said.

The pressure on Starmer had intensified in recent weeks and escalated sharply after Labour Party rival Andy Burnham won a parliamentary seat on Friday, a development that could enable him to mount a formal leadership challenge.

Despite leading the Labour Party to a landslide victory in the 2024 general election, Starmer has reportedly faced growing internal dissent following controversies and policy reversals, which critics say have affected public confidence in his government.

According to reports, more than 100 Labour MPs, around a quarter of the party's parliamentary strength, have publicly called on him either to resign or provide a clear timeline for his departure.

The political developments have added to uncertainty in financial markets, with investors closely watching the leadership situation in the UK.

Meanwhile, US President Donald Trump on Sunday claimed that Starmer's step down from office is due to what he described as failures in immigration and energy policy.

"Keir Starmer will resign as Prime Minister of the United Kingdom," Trump stated on his social media platform, Truth Social.

"He failed badly on two very important subjects - IMMIGRATION AND ENERGY (OPEN NORTH SEA OIL!). I wish him well!" Trump remarked.

Market participants are expected to continue monitoring political developments in the UK, as analysts believe prolonged uncertainty could keep pressure on the pound in the near term.

— ANI