The British pound has largely shrugged off another change of government and geopolitical shocks to outperform many of its peers this year, but the currency's recent weakness could be set to deepen.
Sterling has gained around 1.6% against the euro year-to-date, adding 2.8% against the Swiss franc, 4.9% against the Swedish krona and 1% against the Canadian dollar.
It is near-flat against the U.S. dollar over the same period and down 1.3% against the Japanese yen.
The resignation of Prime Minister Keir Starmer on July 20 left Britain facing its seventh leader in 10 years, with markets watching closely whether a new administration would hold to the "fiscal rules" repeatedly emphasized by former Finance Minister Rachel Reeves.
U.K. borrowing costs have risen under Starmer's quickly appointed successor Andy Burnham, also of the center-left Labour Party, but that has occurred in lockstep with a global government bond sell-off.