GBP/USD Drops to 1.2450 as Labour Crisis Intensifies Starmer Leadership Fears

GBP/USD has plunged to around 1.2450, down 0.8% on May 15, as a leaked Labour Party report and shadow cabinet resignation fuel fears of PM Keir Starmer's ousting or a snap election, shaking market confidence. The pair had surged 0.65% to 1.3630 on May 6 amid US-Iran deal hopes, robust UK Composite PMI at 52.6, and BoE's hawkish hold at 3.75%, holding gains through May 8 despite strong US NFP (+115K). Declines accelerated from May 11 on stalled Middle East talks, gilt yields above 4.6%, hot US CPI (3.1% y/y vs 2.9% est., core 3.9%), and PPI (0.4% MoM vs 0.3%), overshadowing stronger-than-expected UK Q1 GDP (+0.6% q/q, +1.1% y/y vs 0.8%) on May 14.