Streeting seen as most 'bullish' Chancellor choice for Pound

Keir Starmer’s resignation as Britain’s prime minister has so far been taken remarkably well by both the pound and gilts, which perhaps says as much about the market’s growing lack of sensitivity to these increasingly common political earthquakes than anything else.

Nominations for the next leader will commence on 9th July, with an uncontested coronation of Burnham looking likely to follow around a week later - Wes Streeting has already ducked out of a leadership contest and we think that it would be a political misstep for anyone else to step up to the plate either.

Markets seem upbeat at the prospect of a swift and orderly transition of power, and one that sidesteps a potentially messy and protracted battle for Number 10.

Focus has already turned to Number 11, and the identity of the new chancellor of the exchequer. Investors are already running with the idea that Streeting himself could replace Rachel Reeves role.

Of the potential candidates, we view Streeting as the most bullish outcome for the pound, given his centre-left pragmatism and apparent aversion to aggressive tax-and-spend policies.

Much remains up in the air, however, and with talk of a three-month transition period, we remain wary that a period of political paralysis could weigh on UK assets before Burnham officially takes the reins.