Why Is the Pound Falling? Sterling Nears 2026 Low After Starmer's Resignation

Investors are closely watching Britain's fiscal outlook amid ongoing political uncertainty affecting market sentiment. (Credit: Simon Dawson / No 10 Downing Street, OGL 3 , via Wikimedia Commons)

The British pound fell close to its 2026 low on Monday as Prime Minister Keir Starmer announced his resignation, renewing concerns about the UK's economy, public finances, and fiscal outlook.

Sterling briefly slipped to $1.3181 against the US dollar, approaching its 2026 low of $1.3159 recorded in March. Although the currency later pared some losses, analysts said the pound remains vulnerable as investors assess the implications of a potential leadership transition.