UK: Guardian Mandelson Headlines Pile More Pressure On PM Starmer
The Guardian reports that Peter Mandelson, an alleged friend of the late paedophile financier Jeffrey Epstein, failed security vetting clearance to serve as British ambassador to the United States, but that this was overruled by the Foreign Office after PM Sir Keir Starmer had already announced Mandelson as his pick. Moreover, the report also claims "senior government officials have been considering whether to withhold from parliament documents that would reveal that Mandelson was not given vetting approval from security officials."
- Markets have seen the story as another blow to Sir Keir's already-damaged authority (see UK: Political Risk Premia In UK Assets Increases Following Guardian Story). In the early stages of 2026, especially following Labour's poor performance in the Gorton and Denton by-election, there had been rampant speculation that Sir Keir would face an imminent leadership challenge, or at least one after the 7 May local/devolved parliament elections.
- However, the geopolitical chaos created by the US-Israeli strikes on Iran and subsequent conflagration in the Middle East has upended these expectations. Polls show the public broadly supportive of the gov'ts stance of staying out of the war, and this has bolstered the PM's position.
- Headlines that raise public perceptions of a 'cover up' at the top of gov't regarding Mandelson's appointment are only likely to result in renewed pressure on the PM. Given widespread expectations for significant Labour losses in May, the stability of Sir Keir's position is likely to return to the foreground of political speculation.
- A further decline in Labour's (already extremely low) polling support could spur senior figures from the left such as former Deputy PM Angela Rayner or Energy Secretary Ed Miliband, or those from the right such as Health Secretary Wes Streeting to launch a challenge against the PM.
Chart 1. Predictions Market Implied Probability PM Starmer Leaves Office by June 30
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
SOFR OPTIONS: Conditional Bull Curve Flattener
- +11,000 SFRZ6/2QZ6 97.12/97.62 call spd spds 3.5 net bull flattener (Green Dec over)
- Elsewhere - two-way put flow continues with underlying holding modest gains
- -10,000 SFRJ6 96.31/SFRM6 96.25 put strips 3.0-3.5
- +8,000 SFRM6 96.31/96.37 2x1 put spds, 1.0 ref 99.38
US: Senate To Start Marathon Debate On SAVE Act Today
Senate Minority Leader John Thune (R-SD) will open debate today on the SAVE America Act, a sweeping package of voter rights bills that Trump says is his “No. 1 priority.” The measure appears to have no route to becoming law, as institutionalist Republicans have rejected Trump’s call to terminate the Senate’s 60-vote filibuster, fearing the consequences for legislation if Democrats are in control of both chambers of Congress.
- CBS notes, "Trump upped the ante last week when he threatened not to sign most other bills until Congress passes the SAVE America Act, adding to growing calls for Republicans to maneuver around the Senate's 60-vote filibuster threshold."
- An initial procedural vote is expected at around 15:00 ET 19:00 GMT to open debate on the measure. It will require a simple majority to pass. Thune likely calculates that dedicating considerable floor time to the package will be enough to keep Trump onside, while maintaining the Senate's filibuster.
- Politico notes, “Republicans will start with a vote to begin consideration of the House-passed bill that would institute new citizenship and photo ID requirements in order to participate in elections. As of Monday, GOP leaders appeared to still be working to lock down support. Thune can lose three Republicans and still have Vice President JD Vance break a tie. Then, Thune is expected to keep control of the Senate by taking steps to block Democrats from being able to force votes on a deluge of amendments that could put Republicans in a difficult spot.”
BOC: Proposed Instant Answers For Bank of Canada Rate Decision Wed
Following are the proposed Instant Answers for the Bank of Canada interest-rate decision due Wed at 945am EST:
- Overnight Rate Target (level in x.xx%):
- Does the Bank signal it is prepared to lower rates in the future?
- Does the Bank signal it is prepared to raise interest rates in the future?
- Does the Bank say the policy rate appears appropriate if its economic forecast is realized?
- Does the Bank signal it intends to leave rates on hold?
