Pound set for worst monthly performance since July
Sterling has dropped 2.2% in June, the most in a month since July 2025, when it declined 3.8%
The pound was set for its worst monthly performance since last July on Thursday, in a week that marked the tenth anniversary of the Brexit vote and brought the resignation of Labour Prime Minister Keir Starmer.
Sterling has dropped 2.2% in June, the most in a month since July 2025, when it declined 3.8%. It was trading at $1.3161 on Thursday, down 0.1% on the day and not far from its lowest since November.
The suspension of hostilities between Iran and U.S. has allowed oil to move once again through the Strait of Hormuz, which has knocked 20% from crude oil price in a gap of two weeks. This has taken some pressure from the Bank of England to hike rates to keep away a damaging spike in inflation and with it, removed a potential tailwind for the currency.
Markets show traders think there will be one rate rise this year, down from two just a couple of weeks ago.
Meanwhile, Starmer’s plummeting popularity prompted him to resign on Monday, meaning the country will get its seventh prime minister in the 10 years since it voted to leave the European Union, the anniversary of which fell on June 23.
Former Greater Manchester mayor Andy Burnham, who took up a seat in parliament this week after winning a local election, is the frontrunner to take over from Starmer. The assumption is he will not retain current finance minister Rachel Reeves.
Investors are keen to see who he names as her replacement and how well they can retain the confidence of bondholders.