Sterling steady as Burnham set to become prime minister

LONDON: The pound was broadly steady on Monday with Andy Burnham set to take over as British Prime Minister from Keir Starmer, while markets keenly awaited confirmation of who will be tapped as the new chancellor.

Sterling was last little changed against the dollar at $1.3457.

Against the euro, it was 0.1% higher at 84.94 pence.

After Starmer makes his farewell speech outside his Number 10 Downing Street office and tenders his resignation formally to King Charles, Burnham — a former mayor of Greater Manchester — will also meet the monarch to become prime minister.

Burnham will face an array of challenges in his new role, a number of which could impact markets — from a sluggish economy to worries about fiscal discipline.

His choice of chancellor has been a key question for investors in recent weeks.

UK assets were supported last week by reports that he would likely pick Shabana Mahmood, who is regarded as a centrist, as his finance minister rather than a more left-leaning candidate.

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Markets took this as a signal that Burnham is not planning to ramp up spending as some investors had originally feared.

The pound notched its third consecutive weekly rise against the dollar and its fourth week of gains in a row against the euro last week.

Besides domestic politics, investors will also be keeping an eye on various key UK economic data points throughout the week, with labour market, inflation and retail sales figures all due.