UBS: Pound may face tough times after UK local elections.

Analysts at UBS Bank stated in a report that both the ruling Labour Party and the opposition Conservative Party performed poorly in last week's local elections, and as a result, the pound may face challenges in the short and medium term. "The results of the local elections may have short-term and long-term consequences," they said. They noted that Labour MPs may question Prime Minister Keir Starmer's leadership abilities, and there is a lack of reliable candidates to replace him. The bond market has to some extent reflected this expectation, with yields on two-year and ten-year bonds rising. They said that given the fragile debt sustainability dynamics and higher inflation expectations, higher yields are unlikely to benefit the pound. The euro rose 0.1% to 0.8651 pounds, and UBP expects it to reach 0.90 pounds by the end of the year.