Sterling Falls to Seven-Month Low at $1.3180 as UK Politics and Weak Data Collide
Sterling has fallen to a seven-month low at $1.3180 on Friday open as UK political-transition uncertainty and weak macroeconomic data combined to pressure the pound. UK 10-year gilt yields rose further to 4.92%. The FTSE 100 opened broadly flat at 10,650. Brent crude eased to $85.10 on continued Iran framework progress. The pound’s slide compounds the PMI 14-month-low backdrop and the BBC Reeves-replacement reporting. Bank of America commentary keeps the August Bank Rate cut probability above 50%.
The sterling seven-month low at $1.3180 is the structural FX-market acknowledgement of the dual political-transition and weak-data pressure. The pound is being squeezed from both ends: domestic UK political uncertainty around the Burnham coronation and Chancellor question, plus the weak PMI service-sector contraction. The political-mathematical implication for Chancellor Rachel Reeves: the structural fiscal-credibility pricing has materially deteriorated. The Brent $85-95 band that delivers a flat Ofgem October price-cap reset remains the operative range.