The British Pound climbed to its strongest level in 10 months against the Euro on Wednesday, as UK markets reacted to speculation over who could become finance minister under Andy Burnham, the expected successor to Keir Starmer as prime minister.

The Euro slipped to 86.03 pence overnight, its weakest level since August 2025, and was down 0.1% versus Sterling at the time of writing.

Sterling has also performed better against the Dollar this month, with the US currency gaining on expectations of Federal Reserve rate hikes driven by rising inflation and a robust US economy.

Sterling was last down 0.1% against the greenback at $1.319, while the Euro slipped 0.2%.

Andy Burnham appeared to be on course for an uncontested path to becoming the UK’s seventh prime minister in a decade after minister Darren Jones announced on Wednesday that he would not stand for the Labour leadership and instead endorsed the former Manchester mayor.

Reports suggest that current Chancellor Rachel Reeves is expected to step down if Andy Burnham becomes PM.

Former health secretary Wes Streeting, seen as more pro-business, is among those being mentioned as possible contenders to replace her, Reuters reports.

The path toward a Burnham coronation appears to be gradually clearing, providing only marginal support for Sterling.

Reports that Wes Streeting has emerged as a frontrunner to succeed Rachel Reeves are also seen by some outlets as a factor helping the Pound.

However, analysts note that this remains a honeymoon phase for Burnham politically, while underlying economic conditions continue to pose significant challenges.

JPMorgan strategists said on Monday that the reduction in political uncertainty, with Andy Burnham likely to become prime minister unopposed, could allow “Sterling-positive themes,” such as resilient UK growth, to take centre stage.

Despite a modest gain against the Euro, the Pound has still fallen around 2% versus the US Dollar this month, as markets increase their expectations of Federal Reserve rate hikes.

Markets were most recently pricing in about 38 basis points of Federal Reserve rate hikes this year, compared with just 24 basis points for the Bank of England, which has strengthened the Dollar’s relative attractiveness.