UK: Starmer Faces PMQs @ Top Of Hour Amid Speculation Of Leadership Challenge
It is a rare occasion when Prime Minister's Questions is a market moving or relevant event, with the last instance coming in July when images of Chancellor of the Exchequer Rachel Reeves in an emotional state in the House of Commons, amid speculation over her position, sparked a notable selloff in UK assets. Today's session (starting at the top of the hour, livestream here) could garner more interest given the political and media furore over the past 12 hours following a series of briefings from Downing Street figures regarding the possibility of leadership challenges against PM Sir Keir Starmer from prominent centrists in cabinet: Health Secretary Wes Streeting or Home Secrerary Shabana Mahmood.
- The subsequent counter-briefings and internal political infighting within Downing St and the wider centre-left Labour party has only added to perceptions of chaos and instability at the heart of gov't.
- A cover story from The New Statesman (seen as the political journal of record for the centre-left in the UK) claims that "In today’s Labour Party, there is constant, fevered discussion about the prospect of a leadership challenge in May (after the local, Scottish and Welsh elections) or in the aftermath of the Budget, about the possible contenders and the exact mechanism by which it would be done."
- Polls from multiple outlets showing Labour falling to third, or even fouth place nationwide. The poor polling is also specific to Starmer. A satisfation survey from Ipsos shows Starmer with the worst approval ratings of any prime minister since it began taking surveys in 1977.
- This comes in terms of worst net rating (-66, nearest comparison John Major in Aug 1994 and Rishi Sunak in Apr 2024, both -59), the worst 'satisfied' rating (13%, nearest Rishi Sunak Apr 2024 and Liz Truss Oct 2022, both 16%), and 'dissatisfied' rating (79%, nearest Margaret Thatcher Mar 1990 and John Major Aug 1994, both 76%).
Chart 1. Leader Satisfaction, Worst Rating for Each PM, %
Source: Ipsos
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BOE: Greene on labour market weakening slowing - in line with other MPC hawks
"*BOE'S GREENE: SIGNS LABOR MARKET WEAKENING IS BOTTOMING OUT" Bloomberg
This has also been a view shared to some degree amongst the less dovish members of the MPC. Mann said last week that the labour market was not "falling off a cliff" - but that when she voted for a 50bp cut it appeared as though it might be. Tomorrow's report therefore remains extremely important for future monetary policy.
BOE: Greene's comments remain consistent with last week
"*BOE'S GREENE: MIGHT NEED TO WORRY MORE ABOUT 2ND-ROUND EFFECTS
*BOE'S GREENE: I AM CONCERNED ABOUT HOW RESTRICTIVE MONETARY IS
*BOE'S GREENE: CASE FOR HIGHER FOR LONGER RATES, SKIPPING CUT" Bloomberg
These are all in line with recent communications. The MPC statement still describes policy as restrictive too ("The timing and pace of future reductions in the restrictiveness of policy...").
