Britain awaits a new prime minister. “It has become inevitable”
Andy Burnham, former mayor of Greater Manchester, who according to reports could become the next Prime Minister of the United Kingdom, will soon deliver his first speech since announcing his candidacy for the position.
According to BBC, in his address in Manchester Burnham will outline the key elements of his programme.
If no other Labour MP declares a candidacy for party leader, it could open the way for him to become prime minister as early as July 20.
“It is expected that in Monday’s speech Burnham will state that the government must ‘provide the United Kingdom with an essential safeguard mechanism’, and will also present his view on the reasons for low public confidence in politics,” British media report.
“He will say that the decision‑making process should be ‘handed over to regions and local communities’, and promise ‘good economic growth in every area’,” it added.
Expectations for Burnham’s potential role at the head of government are heightened by the resignation of Keir Starmer from the post.
Read also: Keir Starmer has resigned. Britain loses its prime minister
“It has become inevitable,” said in an interview with FXMAG Michał Jóźwiak, XTB financial markets analyst.
“The pound reacted positively to the news, which may suggest that markets saw the resignation as a chance to end the paralysis that has been plaguing the Labour Party for weeks. Especially since investors have no major doubts that Andy Burnham will become the country’s new prime minister,” he added.
The expert noted that the British currency may soon be weighed down by the lack of consensus within the Labour Party and the power‑transfer process.
“At the moment, there is little evidence of that – the party seems to understand that it needs rapid consolidation, and Burnham’s convincing win in Makerfield showed that he can win back voters from both Reform UK and the Greens,” he added.
Nevertheless, as the analyst stresses, there are many challenges that could hinder Burnham’s “easy start”.
Markets may be concerned about Burnham’s interventionist approach to the economy, including suggestions that the United Kingdom should not be at the mercy of bond markets. He has recently distanced himself from those comments. He also cited the positions of key advisers Andy Haldane, former chief economist of the BoE, and Richard Hughes, former OBR chair.
We see this as an attempt to calm market anxieties in the face of a still very tense bond market situation, where yields remain close to levels last seen during the Great Financial Crisis.
“It seems that Labour, including Burnham himself, will be extra cautious regarding any statements about fiscal policy easing, such as the budget presented in November by Treasury Secretary Rachel Reeves,” Michał Jóźwiak said.
“Careless actions on this front are probably the biggest risk that Burnham’s government could pose to the pound. At the same time, with proper care for fiscal balance, a change in power could slightly improve social sentiment after months of internal government tensions, creating space for appreciation of the British currency,” he summed up.
Read more in the article: The pound’s response to the shock in Britain! Who will be the new UK prime minister? The expert gave a name.
See also: Will the dollar still surprise? The expert issued a forecast for USD/PLN and EUR/USD. “It’s hard for me to believe there will be no more fires.”
Pound exchange rate on Monday, June 29
The pound’s exchange rate to the zloty on Monday, June 29 is at 4,96 PLN.
Chart. Pound to zloty (GBP/PLN)
Source: Trading Economics.
The euro to pound rate reaches 0,86 GBP.
Chart. Euro to pound (EUR/GBP)
Source: Trading Economics.
The pound to dollar rate hovers around 1,32 USD.
Chart. Pound to dollar (GBP/USD)
Source: Trading Economics.
Read also: Dollar’s long journey to 4 PLN? The expert issued forecasts for USD/PLN and EUR/USD. “The dollar may gain.”
See also: Dollar before a “nervous and dynamic” move, euro awaiting a drop? The expert issued a forecast for USD/PLN and EUR/USD
Source: BBC.
