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Sterling finds support as markets expect reduced UK political turmoil

Commerzbank said the pound initially rose after Andy Burnham’s move into 10 Downing Street, but warned gains could fade if growth and fiscal consolidation disappoint.

Reported · Written up by our desk · Major Pairs

FXStreet reports that Commerzbank’s Thu Lan Nguyen said the British pound strengthened at first as markets welcomed Andy Burnham’s rapid move into 10 Downing Street and looked for reduced political turmoil.

The analyst cautioned that the UK still faces stagnating growth, high debt, and rising costs, any of which could undermine the current positive sentiment.

Commerzbank noted Burnham will need to revive the economy while also consolidating public finances, and the strategy depends on confidence from financial markets.

FXStreet reports Commerzbank added that markets may give Burnham the benefit of the doubt in the short term, but sentiment could reverse if political and economic realities start to weigh in more heavily over time.

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