GBP/USD Forecast: Pound Sterling at One-Month Low on Burnham News

Modified: Thursday, 14 May 2026 20:36 BST - Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling at One-Month Low on Burnham News

The Pound US Dollar (GBP/USD) exchange rate struggled to capitalise on stronger UK GDP data on Thursday, as persistent political uncertainty in Britain and speculation surrounding Andy Burnham’s return to Westminster kept Sterling under pressure.

At the time of writing, GBP/USD was trading at $1.3405, down roughly 0.9% on the day and hovering close to a one month low.

The Pound (GBP) struggled to regain ground on Thursday, as stronger-than-expected UK growth data failed to offset mounting unease over the domestic political backdrop.

Figures showed that the UK economy grew by 0.6% in the first quarter of 2026, while March GDP also beat forecasts with a 0.3% expansion, despite disruption linked to the outbreak of the US-Iran war.

However, the upbeat data offered Sterling only limited relief as investors remained focused on the escalating Labour leadership crisis.

Reports suggested that support is growing for Greater Manchester Mayor Andy Burnham to return to Parliament through a by-election, potentially paving the way for a future leadership challenge against Prime Minister Keir Starmer.

Political tensions intensified further after renewed reports linked Health Secretary Wes Streeting to possible leadership ambitions, adding to broader market unease over the UK’s fiscal and political outlook.

With political instability continuing to overshadow the economic outlook, the Pound was left trading defensively.

Meanwhile, the US Dollar (USD) lost some momentum as a modest improvement in market sentiment reduced demand for the safe-haven ‘Greenback’.

The US Dollar had been well supported earlier in the week, after signs of faster US inflation strengthened expectations that the Federal Reserve could keep interest rates elevated for longer.

However, by Thursday, those drivers had begun to fade slightly as investors showed greater willingness to move back into riskier, higher-yielding assets.

Even so, lingering geopolitical tensions and uncertainty surrounding US-Iran negotiations continued to underpin the ‘Greenback’ and limit downside pressure.

Near-Term GBP/USD Forecast: UK Political Uncertainty to Steer Sterling

Looking ahead, Friday’s US industrial production data could influence the US Dollar, with economists expecting output to have staged a modest rebound last month.

Even so, broader risk sentiment may remain the key driver of USD exchange rates. If market confidence continues to improve, demand for the safe-haven ‘Greenback’ could weaken further.

On the other hand, a deterioration in risk appetite – potentially triggered by renewed tensions in the Middle East – may help USD regain support.

For the Pound, attention is likely to stay firmly on developments in Westminster. Should speculation surrounding Andy Burnham’s return to Parliament continue to build, or if a Labour leadership contest begins to take shape, Sterling may face renewed selling pressure.

However, if Keir Starmer is able to stabilise his position and calm fears of a prolonged leadership battle, the Pound could begin to recover some of its recent losses.

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TAGS: Pound Dollar Forecasts