British Pound: Political risk premium builds against Euro – ING
The post British Pound: Political risk premium builds against Euro – ING appeared on BitcoinEthereumNews.com. ING’s Francesco Pesole highlights rising political uncertainty in the United Kingdom (UK) as calls grow for Prime Minister Keir Starmer’s resignation, with betting markets seeing a high chance he leaves office this year. He notes emerging political risk premium in EUR/GBP and warns sterling could face further pressure as markets assess leadership contenders and fiscal-rule credibility. Sterling pressured by UK political turmoil “The pound started coming under pressure yesterday afternoon (after a strong session) as calls for Starmer’s resignation intensified. For the first time in a long time, some political risk premium seems to be emerging in EUR/GBP.” “That is, however, still small according to our model, around 0.3% short-term overvaluation.” “The pound has plenty of additional room to build a negative premium, with markets likely to shift their focus to which candidate hol