Pound Cuts Gains

2026-07-21 15:57 By Joana Taborda 1 min. read

The British pound erased its early gains to trade below $1.34, its lowest level in a week, as investors continued to assess the UK's evolving political landscape.

Newly appointed Prime Minister Andy Burnham, who took office on Monday, unexpectedly named former Defence Secretary John Healey as chancellor.

Healey was not considered a frontrunner for the role, but his appointment has fueled expectations of higher defence spending.

Seeking to reassure markets, Burnham and Healey emphasized their commitment to maintaining fiscal discipline, after the prime minister appeared to step back from plans to raise the personal income tax allowance.

On the economic front, data from the ONS showed UK public sector borrowing totaled £16 billion in June, around one-third lower than a year earlier and below market expectations.

Investors also kept a close eye on developments in the Middle East and the subsequent rise in oil prices.



News Stream
Pound Cuts Gains
The British pound erased its early gains to trade below $1.34, its lowest level in a week, as investors continued to assess the UK's evolving political landscape. Newly appointed Prime Minister Andy Burnham, who took office on Monday, unexpectedly named former Defence Secretary John Healey as chancellor. Healey was not considered a frontrunner for the role, but his appointment has fueled expectations of higher defence spending. Seeking to reassure markets, Burnham and Healey emphasized their commitment to maintaining fiscal discipline, after the prime minister appeared to step back from plans to raise the personal income tax allowance. On the economic front, data from the ONS showed UK public sector borrowing totaled £16 billion in June, around one-third lower than a year earlier and below market expectations. Investors also kept a close eye on developments in the Middle East and the subsequent rise in oil prices.
2026-07-21
Sterling Steady as Burnham Names Healey Chancellor
Sterling held above $1.34, unchanged from the prior session, after UK Prime Minister Andy Burnham unexpectedly appointed John Healey, the former defense secretary, as chancellor. Healey, a surprise choice, was not among the favored candidates, but his selection may signal increased defense spending ahead. In terms of policies, Burnham has so far pledged to cut taxes on energy bills, funded by scrapping the Digital ID program. Meanwhile, ONS data showed UK government borrowing hit £16 billion in June, a third lower than the previous year and below market forecasts. Wage growth slowed to 4.3% in the three months to May, slightly under expectations, while unemployment held at 4.9%. Investors are also tracking Middle East developments, with renewed optimism for US-Iran diplomacy following recent regional escalations.
2026-07-21
Sterling Falls After Burnham Takes Office
The British pound fell to around $1.342 on Monday as investors assessed the appointment of Andy Burnham as the UK's new prime minister and continued to monitor the outlook for monetary policy. Burnham, who succeeded Keir Starmer unopposed, becomes the country's seventh prime minister in the past decade and the second since Labour returned to power in 2024. He reaffirmed his commitment to existing fiscal rules while signalling he is considering raising the income tax personal allowance, which has remained frozen in recent years. Attention has now shifted to his choice of chancellor, with reports that Shabana Mahmood is the leading candidate. Meanwhile, elevated oil prices continued to fuel inflation concerns, reinforcing expectations that the Bank of England will keep interest rates higher for longer.
2026-07-20