The pound rose on Monday but remained close to its lowest level since early April as concerns over rising inflation from higher energy prices combined with political uncertainty in Britain.
Prime Minister Keir Starmer faces mounting pressure to resign following poor local election results earlier in May, which have driven gilt yields sharply higher and weighed on the currency.
Labour’s heavy losses in the May 7 elections prompted nearly a quarter of the party’s lawmakers to call for Starmer’s resignation. Two rivals are openly competing to replace him, unsettling investors who have pushed up the government’s borrowing costs.
"I am focused on the job that I was asked to do," Starmer said.
Sterling was last up 0.4% on the day at $1.337, after falling earlier to $1.3304, its lowest since April 8.
UK gilt yields surged to multi-year highs last week as investors worry that a potential left-leaning successor might expand government borrowing.
