Commerzbank: If the UK local elections rekindle fiscal concerns, the pound may depreciate

He stated that the ruling Labour Party is expected to suffer a significant setback, which could reignite concerns over Prime Minister Keir Starmer's fate. He said potential successors may be more inclined toward the party's left wing, which would rather forgo balancing the budget in order to allocate more funds to various projects. In recent years, the difficult state of public finances has weighed on the pound. "If this kind of fiscal discipline is now called into question, the pound could once again come under significant pressure." The pound rose by 0.1% to $1.3602. The euro fell by 0.1% to £0.8637.