Sterling enjoyed a broad rise on Tuesday, bolstered by investor relief that Rishi Sunak won the leadership race to become the next prime minister.

The UK’s third PM in under two months has a series of challenges and will have to hit the ground running. Jeremy Hunt is predicted to serve as chancellor under Sunak.

Borrowing costs have soared in the UK, surpassing those of other nations such as Greece and Italy, whilst Sterling plummeted to all-time lows after former PM Liz Truss announced economic plans that shook financial markets, Reuters reports.

"One thing that will be unmasked, certainly in the next few days, is the whole line-up of poor fundamentals that existed before the mini-budget are still very much there. And what Liz Truss really did was accentuate a torrid time for UK assets," Rabobank strategist Jane Foley stated.

As it stands, the government has a £44 billion current account deficit, along with a growth slowdown and skyrocketing inflation.

"Yields have come down from the peaks and money-market rates have come back and there is a lot of hope that Rishi Sunak will be the market-friendly candidate that can deliver something with Jeremy Hunt next week which will be as market-friendly as it can given the circumstances. But we still have a looming current account deficit, which of course exposes Sterling to the winds of international investors if they don’t like those UK fundamentals," Foley added.

The Pound was up 0.47% against the Dollar at $1.1329 at the time of writing, and 0.4% higher against the Euro at 87.14 pence.

Sterling fell to a record low of $1.0327 against the Dollar following last month’s mini budget. Since then, it has regained close to 9.5%, but remains 16% lower this year against the greenback and 4% down against the single currency.