Collapse in the British government. Who will become the new Prime Minister of the United Kingdom?
After a series of political failures on Monday, 22 June, Keir Starmer announced his resignation as Prime Minister of the United Kingdom.
The Labour Party leader stepped down after consultations with colleagues who were supposed to convince him of the decision’s correctness.
Read also: Keir Starmer steps down. The United Kingdom loses its prime minister
The question my party is currently asking itself is: am I the best person to lead us to the next parliamentary elections?
I heard the answer from my parliamentary faction to that question. I accept it with dignity— Starmer said in a speech delivered at 10 Downing Street.
Krzysztof Kamiński, financial markets analyst at OANDA TMS Brokers, explained in an interview with FXMAG how the political shock in Britain affected the pound’s exchange rate.
“After the news, the GBP initially strengthened against the US dollar by about 0.6% in the first hours, then weakened by more than 0.7% in just under two days. This suggests that investors view the change of prime minister primarily as a source of political uncertainty, not as a standalone impulse for a lasting devaluation of the British currency,” he said.
“I would therefore expect a limited and short‑term impact on the pound, provided the succession process remains orderly. The key will be not just Starmer’s departure, but whether the new prime minister maintains the UK’s fiscal credibility,” he added.
Andy Burnham, former Manchester mayor and newly elected MP for Makerfield, is considered the main candidate to fill the position vacated by Starmer.
“Questions remain about Burnham’s current political views, but within the Labour Party he is seen as the best chance to regain votes from the right‑wing, anti‑immigration Reform UK party of Nigel Farage and from the Greens on the left. He proposed a turning point for the country,” reports The Guardian.
Krzysztof Kamiński warned about the key issues that will affect the pound’s trading in the near future.
“The currency market will be particularly sensitive to signals about the scale of public spending, bond market relations, and potential increases in the state’s borrowing needs. If investors believe the new government may pursue a more expansionary fiscal policy without a clear funding source, pressure on the pound could rise. However, if the succession proceeds smoothly and economic communication remains cautious, the impact on the GBP should be moderate,” he said.
“I will not be original about the successor. The most likely candidate for the new prime minister is currently Andy Burnham. Darren Jones, a close ally of the outgoing prime minister, backed Burnham, and Burnham is now presented as the sole candidate in the Labour Party leadership race. Both Reuters and the Associated Press identify him as a clear favourite, especially after Jones’s withdrawal and support from Wes Streeting. If no serious counter‑candidate emerges, Burnham could take office in mid‑July,” he added.
Read also: Will the United Kingdom lose its prime minister? Keir Starmer under fire from Britons
See also: Will the dollar surprise again? The expert released 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 Thursday, 25 June
The pound’s rate against the zloty on Thursday, 25 June is at 4,97 PLN (+0.16%).
“The pound sterling may remain intermittently more volatile, but I would not expect a strong and lasting weakening solely because of Starmer’s resignation. The most likely political scenario now appears to be a takeover by Andy Burnham, and the GBP’s reaction will depend mainly on how quickly he can convince markets of fiscal stability and the predictability of his economic policy,” said Krzysztof Kamiński.
Read also: The British pound weakens. Starmer loses power, the new prime minister’s name appears?
Chart. Pound to zloty (GBP/PLN)
Source: Trading Economics.
The euro to pound rate falls by 0.13% to 0,86 GBP.
Chart. Euro to pound (EUR/GBP)
Source: Trading Economics.
The pound to dollar rate reaches 1,31 USD after a 0.02% rise.
Chart. Pound to dollar (GBP/USD)
Source: Trading Economics.
Read also: Will the dollar be on a long path to 4 PLN? The expert released forecasts for USD/PLN and EUR/USD. “The dollar could gain.”
See also: Dollar before the “nervous and dynamic” move, euro waiting to fall? The expert released a forecast for USD/PLN and EUR/USD
Sources: BBC, The Guardian.
