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Nigel Farage has triggered a by-election in his own constituency amid intense political pressure.
It’s taken the best part of a month, but the pound has now all but recovered the ground it lost after the Makerfield by-election, the vote that ultimately cost Sir Keir Starmer his job. Against the euro, the pound has strengthened to its best since last June in recent days.
It was therefore unfortunate timing for the embattled Reform leader Nigel Farage to announce he was standing down as MP for Clacton, triggering a by-election he framed as ‘people v establishment’. The British people are no doubt getting rather weary of all these by-elections. All of the other major parties declared they would not field an opposition candidate in an effort to pressure Farage over worsening allegations about the sources of his funding.
While the pound has done well, borrowing costs have been on the rise in the past couple of days. The prospect of more political uncertainty pushed those costs even higher on Tuesday, squeezing any spending room Britain’s next prime minister will have upon entering Downing Street.
On a day of big political news, France’s far-right figurehead Marine Le Pen was cleared to run for president next year, having previously been barred for embezzlement. There are a few strings attached, though. The judges stipulated that Le Pen must wear an electronic tracking bracelet throughout the campaign, a term that she forcefully rejected.
The first significant escalation in the Middle East for several weeks pushed the price of brent crude beyond $75 per barrel this morning. The US military struck 80 military targets in the early hours after Iran reportedly attacked oil tankers in the Strait of Hormuz. The fragile ceasefire has held until now, but the prospect of another round of exchanges weighed on Asian markets in overnight trading.
And finally, holidaymakers jetting off to Europe this summer might be glad to the hear the European Union’s plans to roll out its online pre-authorisation system will be postponed. That follows a bungled effort to implement the separate electronic border checks, which have caused delays and frustration at the start of peak season.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: UK debt unsustainable, OBR says
UK public finances will reach unsustainable levels by the end of the next decade, the Office for Budget Responsibility (OBR) warned yesterday. In what was a pretty dire assessment, analysts said the ballooning cost of pensions and healthcare, as well as the need to invest in defence, would see Britain’s debt-to-GDP ratio hit dangerous heights in around ten years’ time.GBP/USD: the past year
EUR: Uncertainty creates stalemate
The euro stabilised on Tuesday as investors sought clarity around the European Central Bank’s next move. That wasn’t forthcoming, certainly not from the ECB’s Pierre Wunsch, who rather unhelpfully highlighted both upside and downside risks to inflation.GBP/EUR: the past year
USD: Minutes to midnight
Wednesday’s big event for the US dollar will come after the European close with the first FOMC minutes of the Kevin Warsh era. The US dollar strengthened against a basket of its main rivals yesterday. The first hints of labour market weakness haven’t shaken the widespread view that the Fed will leave rates on hold for the time being.USD/GBP: the past year
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