EUR/GBP Eyes Upside as UK Local Election Losses Pressure Fragile Pound – ING

EUR/GBP trades little changed around 0.8610 but faces upside risks after UK local elections delivered heavy losses for Labour, prompting early calls for PM Starmer's resignation and heightening political stress on the pound. The pair consolidated in a 0.8600-0.8650 range from May 6-7 amid subdued volumes, awaiting the May 7 vote, with support from German factory orders (+5% vs +1% consensus) offset by UK fiscal worries, 3.2% CPI, and BoE-ECB divergence (BoE hold at 5.25% May 9 vs ECB cuts from 4.00% in June). ING highlights no prior political premium priced in, with focus now on cabinet stability and borrowing risks.