2026.05.1413:08:09UTC+00Pound Falls as Streeting Resignation Fuels Political Turmoil

The pound weakened to $1.35 on Thursday, heading for its longest losing streak since late March, as political uncertainty intensified following the resignation of Health Secretary Wes Streeting. Streeting is now expected to mount a leadership challenge against Prime Minister Keir Starmer, who is under growing pressure to resign after heavy losses for the ruling Labour Party in last week’s local elections. Angela Rayner, another potential leadership contender, was cleared this morning by HMRC in a tax investigation, potentially paving the way for her to enter the race.

Markets also digested hawkish remarks from the Bank of England’s Sarah Breeden, who said the conflict in the Middle East is “much less likely” to trigger an inflation spike comparable to 2022, although she noted that any necessary rate increases could be delayed until later this year. Meanwhile, the UK economy grew by 0.6% in Q1 2026, with annual growth rising to a stronger-than-expected 1.1%, supported by an unexpected 0.3% expansion in March.