finance

More Starmer Drama as Calls for PM to Quit Rear Over Mandelson

Source: Bloomberg Business

Morning, I'm Louise Moon from Bloomberg UK's breaking news team, bringing you up to speed on today's top business stories.

The Mandelson scandal just keeps roaring back to life.

Keir Starmer may have spent weeks capitalising on crisis abroad to shore up his position, but the Prime Minister is now facing another domestic disaster -- and fresh calls to quit -- over his decision to appoint Peter Mandelson as US envoy.

He's been forced to acknowledged the Foreign Office granted Mandelson security clearance, despite him failing the vetting process. The question now is whether Starmer knew about any cover-up, and what that means for his leadership. Olly Robbins, the foreign office's top civil servant, didn't survive the night and was fired by Starmer.

10-year yields rose in early trading, though moves were relatively contained. Still, the potential for a leadership change is likely to worry investors, as markets fear any successor to Starmer would be more likely to spend and borrow more.

The PM is expected to make a statement in Parliament as soon as Monday in an attempt to clarify the record. Markets will be watching.

What's your take? Ping me on X, LinkedIn or drop me an email at lmoon13@bloomberg.net. Oh, and do subscribe to Bloomberg.com for unlimited access to trusted business journalism on the UK, and beyond.

What We're Watching

Workspace warned investorsBloomberg Terminal it faces a "substantial" profit squeeze due to higher costs and lower rents that will force the flexible office landlord to cut its dividend. Shares fell 12%.

The government is drafting plans to help delink gas prices from electricity costs to shield households from another energy-induced inflation surge. That's as the UK faces a bigger inflation spike than many other countries because of its heavy reliance on gas for energy supply.

The Chancellor also signalled a reluctance to hike taxes or borrow to pay for more spending on military, which leaves spending cuts as the obvious option. Reeves said she's working on a range of options and is willing to make "difficult choices."

Ending on a lighter note, turn to the tale of Heart of Midlothian Football Club. The Scottish team has gone full Moneyball, using data to power a dramatic turnaround in performance. Hearts have led the Scottish league for the past 27 weekends.

Global Catch-Up

Trump says potential deal with Iran 'looking very good' amid ceasefire.
Tokyo's King of 'Death Spiral' Financing Rides Wave of Demand
The $10 billion startup training AI to replace the white-collar workforce.

Markets Today: Waiting for Inflation

Here's your daily snap analysis from Bloomberg UK's Markets Today blog:

The first batch of company earnings has offered hints on what the impact of the Iran war is having, with hits for areas like luxury goods and airlines. But outlooks have mostly been couched in uncertainty because no one knows how long it will last.

There have been hints about how consumers are reacting, however. EasyJet indicated travellers are booking closer to their departure dates, and homewares retailer Dunelm said trading had softened in March. Those are two areas where consumer caution can show up quickly given their relatively discretionary nature.

For the UK's broader economy, the first really clear data on how it is affecting households will arrive in the March inflation reading next week. In February, UK prices for petrol and diesel both declined from a year earlier. In March, the average price for unleaded petrol went up 13%, while diesel jumped 25%.

That's the main area that the spike in oil prices will show through for now. But if there isn't a resolution to the conflict soon that results in the Strait of Hormuz being fully opened, then the effects will spread.

What's Next

Things are heating up on the eco-front next week. A bunch of data for March - the first full month of the Iran war - is due. That includes inflation, government borrowing and retail sales. Jobs stats for February are also scheduled, as well as GfK consumer confidence and Rightmove house prices for April.

On the corporate front, big names include miner Rio Tinto, Dettol owner Reckitt Benckiser and under-pressure LSE Group, as well as Sainsbury's, Plus500, Primark parent AB Foods, Asos and AJ Bell.

$ports Report

Hi, I'm David. I cover the money behind sport -- and the finances of England's 20 Premier League teams aren't quite as rosy as perhaps they should be. Despite being Europe's highest revenue-generating football league, the majority of teams failed to make a profit, according to official accounts.

Premier League revenues rose by a combined 7.5% for last season, yet only five teams made a profit. In two cases, Newcastle United and Aston Villa, losses were avoided only because of some creativity.

Newcastle, owned by Saudi Arabia's Public Investment Fund, was the league's biggest profit generator, posting a £35 million pretax profit. But it would have made a loss if not for a sale of real estate, and a subsidiary to itself. Aston Villa, meanwhile, profited from selling its women's team and a venue company to itself.

The biggest revenue-maker was Liverpool with £703 million, after a year in which it won the league and benefited from its revamped Anfield stadium. Matchday income rose 14% to £115.6 million.

At the other end of the table was Chelsea with a loss of £262 million, with Tottenham Hotspur also languishing. While the cost of sales and administrative expenses rose, its profit on player sales decreased by £94.6 million.

"There's been no shortage of revenue in the Premier League but a continuing inability to control costs," says Liverpool University's Kieran Maguire, who collated the charts. "And a lot of creative accounting."

Pub Quiz

Which gas-intensive sector is not included in Labour's support scheme for British industry, prompting MPs to warn factories could close?

[Yesterday's answer: The Asian stock market that hit a $4.14 trillion total capitalisation as of Wednesday, overtaking the UK, is Taiwan.]

Don't miss Bloomberg's Pointed news quiz each Friday, where you wager points and leverage bets.