Pound Near Two-Month Peak on Mahmood Chancellor Reports

2026-07-16 06:16 By Joana Ferreira 1 min. read

The British pound held above $1.35, its strongest level since mid-May, after rallying on Wednesday amid reports that Home Secretary Shabana Mahmood is set to be appointed chancellor by Andy Burnham.

Investors also assessed fresh data showing the UK economy returned to growth in May, with GDP rising 0.1% after a 0.1% contraction in April.

With Burnham's confirmation largely priced in, market focus has shifted to his choice for the Treasury amid the UK's fragile public finances.

Reports naming Mahmood as the leading candidate helped reassure investors, easing concerns that Burnham could instead appoint Ed Miliband, who is widely seen as favoring a more expansionary fiscal approach.

Meanwhile, escalating tensions in the Middle East have pushed oil prices to one-month highs, reinforcing expectations that the Bank of England will continue tightening monetary policy.

Markets now fully price in a rate hike in November, with another increase expected by March 2027.



News Stream
Pound Near Two-Month Peak on Mahmood Chancellor Reports
The British pound held above $1.35, its strongest level since mid-May, after rallying on Wednesday amid reports that Home Secretary Shabana Mahmood is set to be appointed chancellor by Andy Burnham. Investors also assessed fresh data showing the UK economy returned to growth in May, with GDP rising 0.1% after a 0.1% contraction in April. With Burnham's confirmation largely priced in, market focus has shifted to his choice for the Treasury amid the UK's fragile public finances. Reports naming Mahmood as the leading candidate helped reassure investors, easing concerns that Burnham could instead appoint Ed Miliband, who is widely seen as favoring a more expansionary fiscal approach. Meanwhile, escalating tensions in the Middle East have pushed oil prices to one-month highs, reinforcing expectations that the Bank of England will continue tightening monetary policy. Markets now fully price in a rate hike in November, with another increase expected by March 2027.
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