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Good morning and welcome back to the City AM liveblog.
It’s local election results day and Prime Minister Sir Keir Starmer is bracing for what could be a brutal set of results for the Labour Party.
More than 5,000 council seats are up for grabs, including every single council seat in London. Previously dominant in the capital, Labour could lose a raft of London boroughs as it faces bitter challenges from Reform UK on its right flank and the Green Party on its left.
Zack Polanski’s resurgent Greens are targeting inner-city areas like Lewisham, Lambeth and Hackney – as well as Starmer’s backyard in Camden. But it remains to be seen whether recent PR storms around the Green leader – including allegations of antisemitism – have damaged the popularity of the far-left party.
Nigel Farage’s Reform, on the other hand, are hopeful they can take outer boroughs like Hillingdon, Havering, Bromley and Bexley. Reform has led national polls for more than a year, but more recent surveys suggest its popularity could be plateauing.
Starmer’s party are defending 2,557 seats at this set of elections and some pundits have suggested they could lose up to 1,800. This would be a stunning wipeout which would send Labour reeling and put the Prime Minister in perhaps his weakest position yet.
8 May has long been considered the day on which a move to remove Starmer could be triggered, potentially putting an end to months of speculation around the Prime Minister’s leadership.
The City is bracing for market backlash from the elections and a potential Labour leadership challenge. Most analysts fear a change of Prime Minister could prompt the government to take a leftward turn and loosen fiscal policies, borrowing more from City firms.
Banks are also scrambling to calculate the chances of Angela Rayner or other candidates taking the keys to Downing Street. After gilt yields rose to their highest rate earlier this week, markets are bracing for a political storm.
Get yourself up to date with our election preview and profiles of the state of play in every single London borough.
We’ll bring you every London result as it comes in, plus key market and political reaction, so stay tuned.
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