Daily Brief – UK Local Elections

UK Local Elections

As you read this, the polls will be giving strong indications and pundits will have made themselves hoarse in parsing the results of what has been billed as a seismic set of local elections. With polling closing at 2200hrs last night, while some results are coming in first thing today, most will be announced later today with some slower councils not finishing their counts until tomorrow. As context, there are almost exactly 5000 seats up for grabs and Labour are expected to lose 1900 seats and the Conservatives are expected to lose 800 seats. Of those 2700 seats, Reform is expected to win 1850 seats, the Green Party 450 seats with the balance of 400 mostly going to the Lib Dems with a few going to Independents in Birmingham and Bradford. The range of predictions for both winners and losers is much wider than the numbers above, but the consensus ahead of May 7 was that anything more than 1000 seats lost for Labour would unleash the much predicted Labour leadership contest following the defenestration of PM Starmer.

GBP/USD 1.3620.

US Dollar

In the same way that bad world or war news drives up the USD when fear encourages a flight to the ultimate safe haven of the USD, when better news comes in and which is (hopefully) a cause for optimism on the USA-Iran conflict resolution, it sends the USD lower. That was the case yesterday and gave strength to GBP and also the Japanese Yen. However, such was the move in JPY that the market made the assumption that the Bank of Japan were back in selling USD in support of the JPY. As we have written before, often expectations are as effective as actions when it comes to currency intervention.

USD/JPY 156.40.

UK Interest Rates

All change once again on UK interest rate expectations due to the hopes of a USA-Iran peace deal. Such a deal would lead to much lower energy prices and of course lower inflation. That was enough to shave nearly 20bps off the 2 year Gilt Yield this week. Before describing what that may mean in terms of the 2 or even 3 interest rate hikes anticipated as recently as last week, the actuality and detail of a deal need to emerge. What one can say is that the pressure for the Bank of England to raise interest rates at their next meeting is currently off.

GBP/EUR 1.1567.

Return on Investment

For the cost of a rice cooker (Amazon has a few for GBP 25) cleaner Peak Ong aged 72, netted 10,000 times return. PO claims that it is a story and that she was falsely accused, and the story is that she bought a student a rice cooker which is a prohibited item in student quarters by Aberystwyth University, Wales. PO’s manager, Catherine Green dismissed her in 2022 and Peak Ong brought a case of unfair dismissal against Aberystwyth University. Victimisation, concluded the employment tribunal and awarded Peak Ong GBP 260,000 for the humiliation and fear that she suffered in losing her job. The size of that payout will not only buy plenty more rice cookers but will surely soothe Peak Ong’s humiliation and fear.

EUR/USD 1.1771.

You Can’t Always Get What You Want

This day in 2006, the legend that is Keith Richard of the Rolling Stones having fallen out of a coconut tree in Fiji underwent emergency brain surgery having sustained what he described as a mild concussion. Maybe it was the heroic amounts of alcohol and pharmaceuticals that Keith had taken on board over the years or maybe just plain good luck, but after taking the precaution of cancelling the 2006 European Tour, the Rolling Stones and Keith Richards were soon back playing, touring, partying and almost certainly climbing coconut trees.

I saw her today at the reception
A glass of wine in her hand
I knew she would meet her connection
At her feet was her footloose man

No, you can’t always get what you want
You can’t always get what you want
You can’t always get what you want
But if you try sometime you’ll find
You get what you need

I saw her today at the reception
A glass of wine in her hand
I knew she was gonna meet her connection
At her feet was her footloose man

You can’t always get what you want
You can’t always get what you want
You can’t always get what you want
But if you try sometimes, well, you might find
You get what you need
Ah, yeah
Oh

And I went down to the demonstration
To get my fair share of abuse
Singing, “We’re gonna vent our frustration
If we don’t we’re gonna blow a fifty-amp fuse”
Sing it to me, honey

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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