British Pound: By-election uncertainty weighs on Pound – DBS

FXStreet Insights Team FXStreet

DBS Group Research strategist Chang Wei Liang warns that GBP/USD could stay volatile after easing towards 1.32, as Labour’s Burnham leads the Makerfield by‑election. He argues that Burnham’s left‑leaning stance and potential challenge to PM Starmer raise fiscal uncertainty that could hurt Gilts and the Pound, even as he seeks advice from prominent economists to bolster policy credibility.

Burnham leadership risks cloud UK outlook

"GBP/USD could see further volatility after easing towards 1.32, as Labour’s Burnham leads in the Makerfield by-election."

"Widely regarded as one of Labour’s most popular figures, Burnham is expected to challenge PM Starmer for the party leadership once he enters parliament."

"He is known for advocating left-leaning policies, and it remains unclear whether he can successfully navigate the fiscal rules that have limited Starmer’s policy agenda, particularly in defence and taxation."

"Such political uncertainty could trigger a sell-off in Gilts and weigh on GBP."

"That said, Burnham is reportedly seeking guidance from well-known economists such as Andy Haldane and Jim O’Neill to bolster policy credibility."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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