Finance
Sterling strengthens on easing concerns over PM Starmer's position
Published by Global Banking & Finance Review®
Posted on February 11, 2026
2 min readLast updated: February 11, 2026
Quick Summary
Sterling strengthens as PM Starmer's position stabilizes, easing political concerns and impacting currency markets.
Sterling strengthens on easing concerns over PM Starmer's position
Impact of Political Stability on Currency
LONDON, Feb 11 (Reuters) - Sterling strengthened against the dollar and the euro on Wednesday on investor relief that British Prime Minister Keir Starmer's position looked more secure than it did earlier in the week.
Sterling's Performance Against Major Currencies
The pound rose 0.5% against the dollar to $1.3708, and while much of that was a result of the dollar being weaker across the board ahead of what could be soft U.S. jobs data, the British currency also firmed against the euro. [FRX/]
Market Reactions to Bank of England Decisions
The common currency dropped 0.26% to 86.97 pence and was down from as high as 87.41 pence on Monday, when Starmer's position looked under serious threat.
Future Outlook for Sterling and Economic Data
Starmer pledged on Tuesday to never walk away from his job to change Britain, brushing off a challenge to his authority by the Labour leader in Scotland and other figures in the party who have called on him to quit.
Investors are also assessing the Bank of England's decision to keep rates on hold last week, in an unexpectedly narrow vote, which caused traders to raise their bets on a rate cut in March.
The euro fell as low as 86.13 pence last week before the BoE decision.
"The bulk of the move higher in euro/sterling is justified by dovish Bank of England reinforcing our view that they'll be more active in cutting rates this year," said Lee Hardman, senior currency analyst at MUFG.
"And then the renewed political uncertainty is never helpful for the pound, though it looks for now that Starmer's position as PM is on more secure ground at least until the (May) local elections."
"If he is removed, the knee-jerk reaction is to sell the pound and gilts (British government bonds)".
Once traders have got through the U.S. payrolls data, due later in the day, the focus will be on Thursday's British GDP data for both January and the fourth quarter of 2025.
Stronger data could cause markets to reassess bets on a March BoE rate cut. Traders currently see around 60% chance of a 25 basis point cut.
(Reporting by Alun John; Editing by Anil D'Silva)
Key Takeaways
- •Sterling rose 0.5% against the dollar.
- •PM Keir Starmer's position appears more secure.
- •Bank of England's rate decision influences markets.
- •Euro fell against the pound amid political stability.
- •Traders focus on upcoming UK GDP data.
Frequently Asked Questions about Sterling strengthens on easing concerns over PM Starmer's position
1What is Sterling?
Sterling is the official currency of the United Kingdom, often referred to as the British pound. It is abbreviated as GBP and is used in various financial transactions.
2What is GDP?
Gross Domestic Product (GDP) measures the total economic output of a country. It represents the value of all goods and services produced over a specific time period.
3What is monetary policy?
Monetary policy refers to the actions taken by a country's central bank to control money supply and interest rates, aiming to achieve economic stability and growth.
4What is foreign currency?
Foreign currency is any currency that is not the domestic currency of a specific country. It is often used in international trade and investment.
5What are financial markets?
Financial markets are platforms where buyers and sellers engage in trading financial assets, such as stocks, bonds, currencies, and derivatives.
