Pound gains as Rishi Sunak leads race to become PM

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The pound gained against the dollar after Boris Johnson withdrew from the leadership race.

The pound was 0.4% higher at $1.135 on Monday.

It fell as low as $1.11 on Friday due to continued political uncertainty.

The level needed to take part in the ballot of party members has been reached by Mr Sunak.

Mr Johnson said he wouldn't be able to unite his party and dropped out.

The leader of the Commons is a long way off getting the 100 backers she needs. There is a deadline for her to meet.

Last month, sterling plummeted to a record low against the dollar and the government's borrowing costs went up.

When the Chancellor promised tax cuts without saying how they would be paid for, investors were concerned.

There are reports that Mr Hunt's economic plan for taxes and spending could be delayed because of the leadership race.

Mr Sunak's position as the front runner should calm the markets, according to Megan.

She said that two weeks ago the UK looked un- investable. She said that the UK has a difficult line to walk.

"On the one hand, it can't provide budgets that are fiscally irresponsible, or that seem fiscally irresponsible, we've seen what happens with the market then, but equally, Rishi Sunak is going to come and probably announce a lot of austerity and he can't go too

The economic environment in the UK is difficult even without all the political drama.

It costs more for companies in the UK to buy things from abroad when the pound is weak, because goods and services imported into the UK from overseas are more expensive when the pound is weak.

Businesses can pass on higher costs to customers if the pound weakens.

Changes in the pound's value affect how much money Britons travel with.

The US dollar's strength has put pressure on sterling.

Concerns about the outlook for the UK's economy and public finances have caused the pound to weaken.

The rate of inflation is expected to go up further.

Billions of pounds are being borrowed by the UK to limit energy bill increases.

The Office for National Statistics said that borrowing was up from a year ago.

September's borrowing was the second highest on record.

According to the Institute for Fiscal Studies, borrowing this year could reach £194 billion, almost double the figure previously forecast by The Office for Budget Responsibility.