Pound breaks seven-day rally

Sterling was last down 0.1% at $1.3338 and was steady against the euro, which traded at 0.8055 pounds

The pound ​dropped on Monday, breaking a seven-day stretch of gains as the dollar recovered some strength following a ‌selloff last week after soft U.S. jobs data.

Sterling was last down 0.1% at $1.3338 and was steady against the euro, which traded at 0.8055 pounds.

The decline in the oil price back towards $70 a barrel has taken the pressure off ​central bankers to raise borrowing costs, including the Bank of England. Markets are attaching a 70% chance of just one rate rise ​this year, compared with at least one rise and a strong chance of a second just a couple of weeks ago.

BoE Governor Andrew Bailey said last week the central bank was not in a position to consider cutting interest rates.

A BoE survey on Friday showed UK companies expected ​their prices to increase 4.1% in the year ahead in the three months to June, up from 4.0% in May and ​the highest since early 2024, suggesting the energy price shock had yet to release its grip on corporate pricing plans.

On the political front, ‌the frontrunner ⁠to succeed Keir Starmer as prime minister, Andy Burnham, has yet to pick a finance minister.

Investors have expressed concern about who might take the job and what that might mean for Britain’s stretched finances. Online betting platform Polymarket places a 55% chance of former energy minister Ed Miliband, who is known to be more left-leaning and favour more expansive fiscal policy, getting the ​job.

Andy Burnham seems likely to ​take the post of ⁠PM around the 20th of this month, but first, he needs his Chancellor. Shockingly, Ed Miliband is the bookies’ favourite, quite why is difficult to say, with the former energy secretary and ​Labour party leader being well known for more fiscally expansive budget ideas than the Treasury ​is likely comfortable ⁠with, David Stritch, currency analyst at Caxton FX, said.