Market News

The pound has dropped to its lowest level in more than two years as Sir Keir Starmer comes under fire over alleged threats to his leadership.

Sterling was down 0.4pc to €1.13, its lowest level since April 2023, following accusations of a leadership coup by Health Secretary Wes Streeting.

The decline in the pound came amid worries that a leadership challenge to the prime minister could lead to higher borrowing in Britain.

Mr Streeting denied claims that he was plotting to remove the prime minister from his post and attacked a “toxic” culture in Downing Street.

Sterling also declined 0.5pc against the dollar to $1.3086, its lowest level in six days.

The fall in the pound comes despite a rise in UK bond yields, which usually boost the currency, in a signal that investors were losing confidence.

The slump in the pound follows the ongoing row over Labour leadership challengers.

At Prime Minister’s questions on Wednesday afternoon Sir Keir said he did not authorise briefings against leadership rivals.

“Any attack on any member of my cabinet is unacceptable,” he told the House of Commons.

The political uncertainty also sent government borrowing costs higher on Wednesday, as a potential leadership challenge prompted worry among investors.

The yield on 30-year UK gilts rose four basis points to 5.21pc, having hit their highest level since 1998 in August. The yield on two-year and 10-year gilts also climbed.

06:18pm

That’s all for today

The FTSE 100 closed at a fresh record high, building on a strong recent rebound for stocks.

But it’s the pound that has grabbed the headlines, dropping to its lowest level in more than two years amid pressure on Sir Keir Starmer over alleged threats to his leadership.

Sterling was down 0.4pc to €1.13, its lowest level since April 2023, while it also fell against the dollar.

The political uncertainty also pushed up government borrowing costs as investors grew worried about a potential leadership change in Downing Street.

05:34pm

Markets round-up

While the pound struggled, the FTSE 100 hit another fresh high today thanks to gains for energy giant SSE and gold miners.

The blue-chip index closed 0.1pc higher at 9,911 – a record closing peak. It had earlier set a new intra-day best of 9,930.

Scottish electricity generator SSE led the way, jumping 11pc after it unveiled plans to raise £2bn in new equity to help fund a £33bn five-year investment plan.

Meanwhile, gains for gold provided a boost to Endeavour Mining and Fresnillo, which were up 3.5pc and 1.8pc respectively.

Other winners included luxury goods manufacturer Burberry and insurer Aviva, while Experian fell 4.5pc despite raising its guidance for financial 2026 revenue growth and margin improvement.