The British pound held just above $1.35 on Thursday, near its weakest level since late April, as markets focused on potential leadership challenges to Prime Minister Keir Starmer. Health Secretary Wes Streeting, seen as the most market-friendly candidate, is expected to resign this week and may launch a bid to replace Starmer as soon as today. Meanwhile, Angela Rayner, another potential contender, was cleared by HMRC in a tax probe, possibly clearing her path to join the race. Rayner’s more left-leaning stance is viewed as negative for the gilt market. Economically, UK GDP grew by 0.6% in Q1 2026, with annual growth at 1.1%, better than anticipated. March’s unexpected 0.3% expansion, defying forecasts of a 0.2% contraction, drove the upside.