Sterling has slipped to a two month low but there has been a largely muted response from investors to reports the PM could be about to resign08:55, 22 Jun 2026Updated 08:58, 22 Jun 2026Keir Starmer is said to have spent the weekend discussing his political future with wife Victoria at Chequers (Image: AFP via Getty Images)The pound fell to a two month low amid speculation Keir Starmer is on the brink of announcing his No10 exit.Shares in London initially opened down but then recovered in what was a muted reaction given the prospect of the PM’s possible departure had largely been priced in.It came amid reports that Sir Keir could soon set out a timetable for his departure, paving the way for Andy Burnham to become Britain’s seventh leader since the Brexit vote a decade ago.The main focus is the bond market due to the UK’s already punishingly high borrowing costs and the scale of the national debt.The yield – or rate – on 10-year gilts was broadly flat, at 4.83% – but not far off their highest since the 2008 financial crisis – while on 30 year gilts it actually fell in early trading on Monday, to 4.52%.All eyes on what policies wannabe PM Andy Burnham may enact if he succeeds Keir Starmer (Image: AFP via Getty Images)Chris Beauchamp, chief market analyst at online trading platform IG, said: “It has been coming for months, but today might finally see Starmer give up the ghost on his less than stellar premiership.“For markets, the question is what will really change. Does Burnham, who already has form on flip-flopping, have the strength of will to chart a more dynamic course than the drift exhibited by Starmer’s period in office? Something big is needed to arrest the slide towards Reform, but markets are not likely to be happy with some kind of free-spending approach given the UK’s dire financial state.”Whoever takes over the top job at Number 10 has a tough task on their hands(Image: NEIL HALL/EPA/Shutterstock)Analyst Jim Reid or Deutsche Bank said it was notable that the PM’s possible resignation was happening on the eve of the 10 year anniversary of the Brexit vote, “something the UK still hasn’t come to terms with. Since then, the UK has revolved through six Prime Ministers which, alongside Brexit, underlines the immense difficulties many incumbents have in the Western World today.“Everyone arrives in the post with great hopes but then the lack of growth and financial realities hit. Until you have stronger economic growth and less constrained by debt it’s likely the conveyor belt of PMs will continue.”The stock market reaction is relatively benign given the FTSE 100 is up more than 4% since the start of the year and 17% higher year-on-year.Sterling slipped as much as 0.4% overnight against the US dollar to $1.32. It walso dropped against the euro.“The most important question relates to Mr Burnham’s approach to fiscal policy, his pick of Chancellor and whether he will stick to the fiscal rules,” Nomura economist George Buckley said.
