Starmer fights for political survival
The FT News Briefing from May 11th covers three major stories: the partial reopening of the Strait of Hormuz following a U.S.-Israeli war on Iran, the impact of fuel shortages on airline pricing strategies, and UK Prime Minister Keir Starmer's fight for political survival after Labour's catastrophic local election results.
Summary
The episode opens with an update on the Strait of Hormuz, which has been effectively closed since a U.S.-Israeli war on Iran began in February. A Qatari gas shipment bound for Pakistan became the first to pass through with Iran's approval since the conflict started. Meanwhile, European oil majors Shell, BP, and Total Energies collectively earned an estimated $4.75 billion from volatile energy price swings, while Asian nations have been forced to turn to coal as an alternative, pushing global coal imports in May toward their third-highest monthly figure on record.
Transport journalist Peter Campbell discussed the counterintuitive pricing dynamics in the airline industry. While flights between Europe and Asia have become expensive due to the Gulf closure, some European budget airlines are actually cutting prices on short-haul holiday routes like Spain and Italy. This is because consumer anxiety about potential flight cancellations has suppressed bookings, prompting airlines to lower prices to stimulate demand. Campbell also noted that airlines are using the crisis as leverage for regulatory concessions, employing a coordinated lobbying effort to roll back rules on compensation, baggage, and refueling. On the question of fuel supply, he reported that British Airways and Air France both indicated sufficient fuel stockpiles to last through the summer, though prolonged closure of the Strait could eventually drain strategic reserves.
On the macroeconomic front, PIMCO's chief investment officer Dan Iveson warned that the energy price surge could force the Federal Reserve to raise interest rates, calling potential cuts 'counterproductive' given the inflationary pressures from the war. The Fed's preferred inflation gauge had already hit 3.5% in March, its highest in nearly three years.
The final segment focused on UK Prime Minister Keir Starmer, who faced mounting calls to resign after Labour lost hundreds of seats in local elections, with its national vote share collapsing to just 17%. FT Whitehall correspondent Lucy Fisher explained that Starmer planned a major speech emphasizing closer EU relations, timed around the 10th anniversary of the Brexit referendum. Fisher noted that both Labour and the Conservatives performed poorly, with voters shifting to third parties, which she described as marking 'the death knell for the two-party system' in England. She attributed public frustration to stagnant living standards since the 2008 financial crisis. A King's Speech on Wednesday was also cited as a critical moment for Starmer to present a coherent legislative vision. Fisher suggested that Starmer's survival may hinge more on inertia than confidence, as Labour MPs opposed to his leadership cannot agree on a replacement.
About this episode
<p>A gas shipment made it through the Strait of Hormuz as European oil majors cash in billions from the US-Israeli war on Iran, airlines across Europe are cutting prices for summer flights despite a potential jet fuel shortage, and bond giant Pimco says the war could prompt the Federal Reserve to raise rates. Plus, the FT’s Lucy Fisher explains what to expect from a make-or-break speech by UK prime minister Keir Starmer today. </p><br /><p><strong>Mentioned in this podcast:</strong></p><p><a href="https://www.ft.com/content/2b2a9375-829c-4b4a-af98-c5e1e963c493?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Qatari gas shipment clears Strait of Hormuz after Pakistan-Iran talks</a></p><p><a href="https://www.ft.com/content/f4030665-d5dc-4afd-8e62-9b2ee8a8ad0f?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Euro oil majors make billions off war </a> </p><p><a href="https://www.ft.com/content/94346fc1-ab8b-4113-98dd-0045bddb391f?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Coal shipments jump as countries seek alternatives to disrupted gas supplies</a></p><p><a href="https://www.ft.com/content/d00cfee4-4172-41e9-a174-f73241218f02?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Airlines cut prices to entice holiday bookers worried about jet fuel</a></p><p><a href="https://www.ft.com/content/ba919246-ff50-4b8d-931c-43ee8d37795d?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Iran war could prompt Federal Reserve to raise rates, Pimco says</a></p><p><a href="https://www.ft.com/content/dbb69e78-de9c-451c-bb2a-d7eda8ebe959?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Starmer faces fight for survival as calls to resign escalate</a></p><p><a href="https://www.ft.com/content/a28c0f5c-61ea-47b4-a3cb-d91c4df56f82?accessToken=zwAAAZ6tVABRl88rKpN1gpxLStOvmMXh6WPEk9P0AwZl1dxK_dOOYpsu6KitD9OUNG_Bq4tBE9OY3QBFvds5H9PQDP7kQXJB6dOhdPcyQSGPAtO6kZJG_1BLjdOTHEPujTd5XdPbtp543pxFHNO7KtftqOvpWdOijA9cYepHtNOjy9kcTfVvggE.MEQCIE9-OSLjG1S7_HGVr3p_dXMYedY8ahL6W6kMP1wGHlq0AiBnzUtW4o_AENk2YNwp_DH8Zq7xI2taZuznit4bCERFFw&segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902" rel="noopener noreferrer" target="_blank">Britain’s elections in maps and charts</a></p><p><a href="https://www.ft.com/political-fix" rel="noopener noreferrer" target="_blank">Political Fix podcast </a></p><br /><p>Note: The FT does not use generative AI to voice its podcasts </p><br /><p>Today’s FT News Briefing was hosted by <a href="https://www.ft.com/victoria-craig" rel="noopener noreferrer" target="_blank">Victoria Craig</a>, and produced by Katya Kumkova, Marc Filippino and Saffeya Ahmed. Our show was mixed by Alex Higgins. Additional help from Peter Barber. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s Global Head of Audio. The show’s theme music is by Metaphor Music. </p><br /><p><a href="https://www.ft.com/content/e1ffa741-b2f0-41e1-aabc-39ff07db0979" rel="noopener noreferrer" target="_blank"><strong>Read a transcript of this episode on FT.com</strong></a></p><hr /><p style="color: grey; font-size: 0.75em;"> Hosted on Acast. See <a href="https://acast.com/privacy" rel="noopener noreferrer" style="color: grey;" target="_blank">acast.com/privacy</a> for more information.</p>
Key Insights
- Peter Campbell argued that some European budget airlines are cutting prices on short-haul routes not out of generosity, but because consumer fear of flight cancellations has suppressed bookings, forcing airlines to stimulate demand.
- Campbell reported that airlines are strategically using the fuel crisis as political cover to lobby for the rollback of longstanding consumer protection regulations, channeling the maxim of 'never let a crisis go to waste.'
- Lucy Fisher argued that Starmer's political survival is less a product of confidence in his leadership and more a function of inertia — specifically, that Labour MPs opposed to him cannot agree on a successor, making a leadership challenge unlikely despite widespread dissatisfaction.
- Fisher characterized the UK local election results as marking 'the death knell for the two-party system,' attributing the shift to decades of stagnant living standards dating back to the 2008 financial crash and disappointment with both major parties.
- PIMCO's Dan Iveson argued that the Fed cutting interest rates would be 'counterproductive' given the inflationary surge driven by the Strait of Hormuz closure, contradicting the Fed's own signals that its next move would be a rate cut.
Topics
Transcript
Thinking long-term about your investment career? Hear stories, advice, and lessons from seasoned leaders at Capital Group on the Capital Ideas Podcast. Subscribe and start listening today. Published by Capital Client Group, Inc. Good morning from the Financial Times. Today is Monday, May 11th, and this is your FT News Briefing. We've got a few updates on the situation in the Strait of Hormuz, and despite warnings of jet fuel shortages, some airlines are not upping their ticket prices. Plus, Britain's Prime Minister will step up to the podium today as calls for him to resign get louder. This is being billed as the speech of Starmer's career after the absolutely dismal results for the ruling Labour Party in the…
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