Pound dips as senior UK minister resigns, ramping up UK political crisis

LONDON, May 14 (Reuters) - ​Sterling dropped ⁠on Thursday, while UK ​government bonds held on to their price gains, ​as ‌a political crisis in the UK escalated with ⁠the resignation of health minister Wes ⁠Streeting turning up ​the heat on Prime Minister Keir Starmer.

Starmer is under pressure to resign over hefty losses for the ​ruling ‌Labour party in last week's local elections.

Sterling fell as much as 0.2% to $1.3502, having traded around $1.351 prior to the news. ​It was last at $1.3518.

The pound weakened to ‌86.68 pence per euro, from 86.66 earlier.

Britain's 10-year UK gilt yield was ‌down 4.2 basis points on the day at 5.026%, from around 5.05% earlier on, while London's ​blue-chip FTSE stock index was last up 0.38%.

"The big question ‌is that the markets want to know how does this leave the direction of fiscal ⁠policy. ⁠It certainly opens up a huge ‌amount of uncertainty, but we honestly don't know yet," Investec ​chief ​economist Philip Shaw said.

"At the ‌moment, there are a lot of questions, not a whole lot of answers."