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Sir Keir Starmer was grilled in parliament yesterday over the Peter Mandelson affair.
Staring down a major political crisis, Sir Keir Starmer on Monday faced accusations of misleading parliament over the appointment of Peter Mandelson as ambassador to the United States, albeit only invertedly. In a moody afternoon session, the PM pinned the scandal on the deliberate withholding of information by Foreign Office officials.
This morning, UK economic data unexpectedly provided a positive counterpoint to all that. Joblessness dropped from 5.2% to 4.9% in the three-month period ending in February. Average earnings meanwhile ticked down in February but still came in above market forecasts. The pound strengthened modestly against both the US dollar and the euro in early trading.
In a statement to the House of Commons yesterday afternoon, the prime minister said he would not have appointed Mandelson had he known he had failed the government’s security vetting protocols. That drew jeers from MPs, with the Conservatives claiming he had broken the ministerial code.
Nevertheless, Starmer did enough to cling on beyond what quickly came to be known as ‘judgement day’. Recent events have still been highly damaging from the beleaguered Labour leader, whose party are widely expected to perform poorly in next month’s local elections.
Oil prices rose by 5% on Monday as Iran cast doubt on whether it would attend planned talks with the United States this week. Also causing a bit of anxiety was the American seizure of an Iran-flagged cargo ship, which Iran threatened to retaliate against.
Canada became the latest country to highlight the impact of the conflict in its economic data. Consumer price inflation jumped from an annualised 1.8% to 2.4% in March, although that was still slightly below the expected 2.5% increase.
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GBP: Steady despite risks
Sterling navigated a fraught environment on Monday, moving little against both the US dollar and the euro despite the shifting situation in the Middle East and the prime minister’s peril. Its current position does look vulnerable given the raft of challenges it faces.
GBP/USD: the past year
EUR: More consumer fright?
This morning’s German consumer sentiment survey from the centre of economic research (ZEW) will be closely watched after a massive fall in March. Economists expect the mood to dip further into negative territory, although perhaps not by as much as during the Ukraine war, when a record 93-point fall sent the euro tumbling.
GBP/EUR: the past year
USD: Curiously subdued
The US dollar got out of the blocks slowly on Monday, weakening slightly against the pound and a basket of its closest rivals. Perhaps investors are waiting for today’s retail report for some direction, although it was interesting to observe the absence of a safe-haven flight to start the week.
EUR/USD: the past year
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