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Sterling slips, but GBP/USD holds support hopes ahead of UK policy shift

Analysts at Scotiabank link sterling’s recent strength to expectations that a Burnham government will be more market friendly, including new North Sea drilling and Thames Water returning to public control.

Reported · Written up by our desk · Major Pairs

GBP/USD is lower on the day and well off a one year high reached earlier in the week, as optimism about incoming UK Prime Minister Burnham’s policies fades somewhat, according to Scotiabank analysts Shaun Osborne and Eric Theoret.

The new government is expected to allow new North Sea drilling and to bring Thames Water back under public control, a move contrasted with the prior approach under Prime Minister Starmer.

FXStreet notes that trend indicators remain constructive, with Scotiabank pointing to bullish bias from trend oscillators and analysts looking for firm support near 1.34 even after late week slippage.

The note also frames the policy direction as likely to resonate internationally, saying President Trump will likely favor the “drill, baby drill” approach in the context of the expected UK energy and utilities changes.

Latest closeGBP/USD 1.348 ▼0.5%

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