The pound is now down 0.5% against the euro, with one pound currently worth €1.15 after Morgan McSweeney resigned yesterday. The pound also dropped 0.1% against the dollar. Meanwhile, 10-year gilts climbed to above 4.54% – up three basis points. Jane Foley, a foreign exchange strategist at Rabobank, told Bloomberg:
“The market will be very wary of UK political jitters particularly if it starts to look likely that the next PM may come from the left wing of the Labour party.”
The markets are already pricing in a new PM. The line that a change of leader would trigger a bad reaction won’t stick…
Tom Baldwin, author of Starmer’s hagiography, spoke to Times Radio:
Tom Baldwin: “I think he’d like to do something. He’s very dutiful and driven by service. That’s why he came into politics. I think that’s characterised his time as prime minister. He hasn’t always sought popularity or been good at being popular. But I think he has some of the necessary qualities that we actually do want in a prime minister. That resilience, that relentlessness, that ability to carry the weight and the job really does weigh very heavily on people and he carries that weight very, very well.”
Jo Coburn: “NATO Secretary-General?”
Tom Baldwin: “I think that’s something that he would be interested in. I think it probably requires Andy Burnham’s government to support him in that and these are some of the questions which Andy Burnham has to resolve quite quickly.”