SONIA Shrugs Off Labour Majority, ~45bp Of '24 BoE Cuts Priced

GBP STIRs little changed as Labour takes power, attaining a commanding majority.

• SONIA futures are flat to +1.5, while BoE-dated OIS shows ~15bp of cuts for the August MPC and ~45bp of easing through year end.
• Our political risk team notes that the major takeaway from the election is the fracturing of the UK political system, where voter volatility will make maintaining political control beyond one parliament difficult.
• Nevertheless, Labour's significant majority should - at least in the short term - ensure political stability and a stable policy-making environment.
• The UK calendar is sparse, leaving focus on the election fallout and U.S. NFPs.
• Monday will see the REC/KPMG report on jobs and the first round of post-election BoE communication, coming from the hawkish Haskel.