By Simon Eastman
The Pound has had a tough week so far, with significant focus on Prime Minister Kier Starmer’s position, putting the government under significant pressure.
As further files were released regarding Jeffrey Epstein, the PM has come under fire for appointing the former Labour member, Lord Mandelson, as ambassador to the US, knowing about his links to the disgraced billionaire Epstein. The week has thus far been filled with opposition MPs calling for him to resign, whilst his own Labour MPs are equally furious at the pressure he is inflicting on the party. Having given a “put up or shut up” message out in the media, Starmer faced fresh embarrassment as news broke that another Labour member, Lord Matthew Doyle, personally chosen to be director of communications and appointed to the Lords by Starmer, had been suspended for links to convicted paedophile, former Labour councillor Sean Morton.
The pressure on the Pound has seen GBPEUR drop by around 1.5 cents in recent days and GBPUSD drop over 2 cents, although we have seen something of a recovery against both.
Despite fending off various calls to resign, Kier Starmer is causing the Pound to “suffer from uncertainty” according to Commerbanks Michael Pfister, stating it remains “questionable if he will still be PM by the end of the year”. He also stated the uncertainty affecting the Pound is likely to carry on whilst the matter is unresolved, whilst London stockbrokers Panmure Liberum, were quoted as saying “the Pound could lose as much as five percent of its value”, should a more left leaning leader emerge from any leadership campaign caused by Starmer being ousted. Prediction site Polymarket currently has the chances of Starmer being ousted by next summer up at 70% given he still faces questions over his judgement over the Mandelson drama, and this will probably increase given the new drama surrounding Sean Morton.
Yesterday the only data of note was from the US, with retail sales coming out slightly under expectations, but a couple of hawkish speeches from Federal Reserve members Hammack and Logan, saw the Dollar trade within a half cent range against the Pound and a third of a cent against the Euro. Although generally speaking USDEUR is at some of the lowest rates we have seen in months, as the Dollar remains under pressure due to Trumps tariffs.
Today is again all about the US, with the delayed non-farm payrolls and unemployment data released at lunchtime being the only thing of note over the day. We also have three FED and two ECB member speeches over the course of the day, so plenty to affect the rates.
We are sure to see the Pound remain under political pressure today, as the PM continues to navigate the turbulent times he finds himself in, so ensure to keep in touch with your currency consultant here, to let us help make your money go further.