UK: PM Faces Renewed Trade Union Hostility As Unison Elects Far-Left Leader
The election of left-winger Andrea Egan as the next general secretary of Unison, the UK's largest trade union, comes as another political blow to embattled Prime Minister Sir Keir Starmer. Egan won 60% of the vote to 40% for incumbent Christina McAnea, seen as a close ally of Starmer, on a turnout of 7%. Egan will take up a position on the Labour Party's National Executive Committee (NEC), despite her own membership of the party being revoked in 2022 after sharing articles from the extreme-left Social Appeal on social media.
- Unison is one of 11 trade unions officially affiliated with the Labour Party. These unions pay an annual fee to Labour in exchange for 13 of the 39 seats on the NEC, and send 50% of the delegates to the annual party conference.
- The most extreme step Egan could look to take would be formal disaffiliation, denying Labour one of its largest single sources of income. The LabourList news site outlines the notable procedural difficulties this would entail.
- Egan could look to either undermine Starmer's leadership in favour of a replacement that leans further to the left. Ahead of the contest, Egan spoke to the left-leaning New Statesman about both Mayor of Greater Manchester Andy Burnham and former Deputy PM Angela Rayner, two of the frontrunners to oust Starmer, in positive terms.
- Even if Unison does not disaffiliate or formally back a change in leadership, it will now have a more vocal position on dragging party policy further to the left, notably on issues of the tax/spend and workers' rights.
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US DATA: Housing Is Starting To Lead Construction Growth As Data Centers Slow
August construction data - whose Oct. 1 release was delayed 6 weeks due to the federal government shutdown - showed a 0.2% M/M rise in spending (-0.1% expected, 0.2% prior rev from -0.1%). Overall construction looks to be stronger on the residential side than it did earlier in the year, boding positively for that side of the GDP equation, with public sector construction also looking solid enough. However, non-residential construction growth has stalled amid policy uncertainty, with even the vaunted data center boom showing signs of moderating over the summer.
- This was the 3rd consecutive rise in construction (which is expressed in seasonally-adjusted annual rate and nominal terms), the longest expansion since 2023. And the recent pickup is being driven by private sector construction: it rose 0.3% for a 3rd consecutive gain and is now rising 2.3% on a 3M/3M annualized basis following 11 consecutive declines.
- Somewhat surprisingly given the travails of the housing market, the pickup is being driven by residential construction - a 0.8% rise saw the 3M/3M rate jump to 6.1% for the first positive reading since August 2024 and the highest overall since April 2022 (the level is now at the highest of the year).
- Conversely nonresidential construction has contracted 2 months in a row, including manufacturing, both of which are at the lowest levels since 2023.
- One trend worth noting is an apparent slowdown in data center construction. It's still growing at an extremely elevated pace overall, 29% 3M/3M annualized in August, but this is down from nearly 100% at peaks in 2023/24.
- Public sector spending has been consistently positive for the last 6 months, making October's flat reading the weakest since February, but this is still an overall contributor to construction spending. There was virtually no growth in data center construction by value between June and August. That being said, this series has increased 4-fold since the end of 2021 and is worth about 5.5% of total non-residential private construction, up from 2% in that span.
OPTIONS: Expiries for Nov18 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1600-05(E915mln), $1.1675(E1.4bln), $1.1700(E1.0bln
- USD/JPY: Y153.00($1.3bln)
FED FUNDS FUTURES: BLOCK: Large Jan'26 Fed Funds Sale
- -18,000 FFF6 96.235, sell through 96.24 post time bid at 1008:37ET, DV01 $750,000.
- The Jan contract trades 96.235 last (-1)
