The pound has crashed to its weakest against the euro since mid-December this morning, following the Labour Party losing the Gorton and Denton by-election to the Greens yesterday.
Since yesterday, sterling has lost between half and two-thirds of a percent against all of its main pairs.
In one of the worst possible results for the current government, Labour lost to the more left-wing challenger but also trailed behind Reform on the right. This is already leading to renewed speculation over the future of Keir Starmer as prime minister, and the possibility of a more left-wing replacement in the coming months.
Also coming in overnight, the GfK Consumer Confidence reading weakened unexpectedly, amidst “increasing concerns about job security, particularly given the backdrop of weak wage growth,” according to a GfK spokesperson, and driven by deteriorating views of personal finances.
UK car production also declined, by 13.6%, as the UK’s usual markets in the EU, US and China sought to protect their own vehicle industries with, according to motor manufacturers, rising protectionist rhetoric in this new world of tariffs.
Elsewhere in the world, we are just getting inflation data through in the eurozone. France’s inflation has just been reported at 1%. This sharp and unexpected rise, although still far below the target 2%, will have raised eyebrows at the European Central Bank in Frankfurt. Will the rest of the eurozone also see a rise – we’ll be finding out over the next few working days. Spain’s inflation rate remains above target at 2.3%.
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