Sterling could weaken against the euro despite its recent resilience after U.K. Prime Minister Keir Starmer announced his resignation last week, ING's Francesco Pesole says in a note. Andy Burnham is widely expected to succeed Starmer. In recent days Ed Miliband has emerged as the frontrunner to become treasury chief rather than more centrist candidate Wes Streeting, he says. Sterling's resilience suggests markets are pricing in a smooth leadership transition or don't see material risk of fiscal slippage under Miliband, he says. The euro could rise to 0.8700 pounds this summer from 0.8630 pounds currently as it looks undervalued, political risks might resurface and the Bank of England is unlikely to raise interest rates as markets expect, he says.(renae.dyer@wsj.com)