How much further can the USD strengthen?

Hi Henry, thanks again for joining today's podcast.

This week we've seen UK political risk has been a big focus point for financial markets after the resignation of UK Prime Minister Keir Starmer.

But the impact on gilts and the pounds has been relatively muted.

Be interesting to hear your kind of latest thoughts on the recent developments in UK politics and how these policies could change under the new leadership.

Yeah, yeah.

Another UK prime minister.

It sort of follows on, doesn't it, from Andy Burnham, Starmer's key leadership rival.

He won decisively in that by-election last week.

He's back in Parliament.

He's got lots of momentum.

I think Starmer thought the writing on the wall and he announced his resignation on Monday.

It's not a huge surprise.

I think we've been talking about political uncertainty being a key risk theme for some time when we're talking about the UK outlook.

What does it mean for the outlook? Well, initially, it seems as though Burnham will not face a contest to become Labour leader.

There was a chance, of course, that we'd have a leadership contest, which, you know, you have to say that Burnham would ultimately have won it.

But there would have been a period of uncertainty.

There would have been a risk of market volatility if Burnham felt obliged to participate.

make spending pledges.

And it also would have meant policy drift under Starmer kind of in the meantime.

But that's all been avoided.

And I think we saw some signs of relief around that in markets.

But it is going to be a rapid transition.

If he is uncontested, Burnham is set to become UK prime minister as soon as mid-July.

And we're still in the dark, really, when it comes to his economic policies.

He will be constrained a bit by Labour's election manifesto, of course.