15.07.202615:15:39UTC+00Sterling Rises on Treasury Appointment Hopes

The pound rose to $1.348, its highest level since late May, and hit its strongest point against the euro in more than a year, bolstered by expectations that Andy Burnham—widely expected to be confirmed as the UK’s next prime minister on Monday—will appoint a fiscally conservative finance minister. With Burnham’s confirmation largely priced in, investor focus has shifted to his choice for the Treasury, particularly in light of the UK’s fragile public finances. Reports that Home Secretary Shabana Mahmood is the frontrunner to lead the finance ministry have helped steady markets, easing fears that Burnham might instead turn to Ed Miliband, who is seen as favoring a more expansionary fiscal approach. At the same time, escalating tensions in the Middle East have pushed oil prices to one-month highs, reinforcing expectations of further Bank of England interest rate increases. Markets now fully price in a rate hike in November, with another expected by March 2027.