LONDON — Keir Starmer’s keeping Britain out of the war in Iran — but he can’t
duck the conflict’s grave economic consequences.
In a sign of growing fears about the impact of the war on Britain, the prime
minister chaired a rare meeting of the government’s emergency COBRA committee
Monday night, joined by senior ministers and Governor of the Bank of England
Andrew Bailey.
Starmer’s top finance minister, Rachel Reeves, will update the House of Commons
on the economic picture Tuesday, as an already-unpopular administration worries
that chaos in the Middle East is shredding plans to lower the cost of living and
get the British economy growing.
For Starmer’s government — headed for potentially brutal local elections in May
— the crisis in the Gulf risks a nightmare combination of a rise in energy
prices, interest rates, inflation and the cost of government borrowing that
threatens to undermine everything he’s done since winning office.
Economists are now warning that even if Donald Trump’s promise of a “complete
and total resolution of hostilities” with Iran were to bear fruit, the effects
on the British economy could still last for months.
Already there are signs of a split within Starmer’s party over how to respond.
Labour MPs want the government to think seriously about action to protect
households — but Starmer and Reeves have long talked up the need for fiscal
responsibility, and economics are warning that there’s little room for maneuver.
Fuel prices displayed at a Shell garage in Southam, Warwickshire on March 23,
2026. | Jacob King/PA Images via Getty Images
Jim O’Neill, a former Treasury minister who served as an adviser to Reeves, told
POLITICO the government should “not get sucked into reacting to every external
shock” and “concentrate on boosting our underlying growth trend.”
WHY THE UK IS SO HARD HIT
Just before the outbreak of war, there was reason for Starmer and Reeves to feel
quietly optimistic about the long-stagnant British economy. The Bank of England
had expected inflation to fall back sustainably toward its two percent target
for the first time in five years, giving the central bank the space to carry on
cutting interest rates.
With the Iran war in full flow, it was forced to rewrite those forecasts at the
Monetary Policy Committee’s meeting last week — and now sees inflation at around
3.5 percent by the summer.
The U.K. is a big net importer of energy and also needs constant imports of
foreign capital to fund its budget and current account deficits. That’s made it
one of first targets in the financial markets’ crosshairs. The government’s cost
of borrowing has risen by more than half a percentage point over the last month.
That threatens both the real economy and Reeves’ painstakingly-negotiated budget
arithmetic. Higher inflation means higher interest rates and a higher bill for
servicing the government’s debt: fiscal watchdog the Office for Budget
Responsibility estimates a one-point increase in inflation would add £7.3
billion to debt servicing costs in 2026-2027 alone.
The effect on businesses and home owners is also likely to be chilling.
Britain’s banks are already repricing their most popular mortgages, which are
tied to the two-year gilt rate. Hundreds of mortgage products were pulled in a
hurry after the MPC meeting last week, something that will hit the housing
market and depress Reeves’ intake from both stamp duty and capital gains.
Duncan Weldon, an economist and author, said: “Even if this were to stop
tomorrow, the inflation numbers and growth numbers are going to look materially
worse throughout 2026.
“If this continues for longer… it’s an awful lot more challenging and you end up
with a much tougher budget this autumn than the government would have been
hoping to unveil.”
DECISION TIME
The U.K.’s economic plight presents an acute political headache for Starmer, as
he faces a mismatch between his own party’s expectations about the government’s
ability to help people and his own scarce resources.
Energy Secretary Ed Miliband has promised to keep looking at different options
for some form of assistance to bill-payers hit by an energy price shock. A pain
point is looming in July, when a regulated cap on energy costs is due to expire
and bills could jump significantly.
One left-leaning Labour MP, granted anonymity to speak frankly, said: “They
[ministers] need to be treating this like a financial crisis. They need plans
for multiple scenarios with clear triggers for government support.”
A second MP from the 2024 intake said “it’s right that a Labour government steps
in, particularly to help the most vulnerable.”
Foreign Secretary Yvette Cooper and Chancellor of the Exchequer Rachel Reeves at
the first cabinet meeting of the new year at No. 10 Downing St. on Jan. 6, 2026
in London, England. | Pool photo by Richard Pohle via Getty Images
This demand for action is being felt in the upper echelons of the party too, as
Culture Secretary Lisa Nandy recently argued Reeves’ fiscal rules — seen as
crucial in the Treasury to reassure the markets — may need to be reconsidered if
prices continue to rise and a major support package is needed.
One Labour official said there are clear disagreements with Labour over how to
go about drawing up help and warned “the fiscal approach is going to be a
massive dividing line at any leadership election.” The same official pointed to
recent comments by former Starmer deputy — and likely leadership contender —
Angela Rayner about the OBR, with Rayner accusing the watchdog of ignoring the
“social benefit” of government spending.
Despite the pressure, ministers have so far restricted themselves to criticizing
petrol retailers for alleged profiteering, and have been flirting with new
powers for markets watchdog the Competition and Markets Authority. The
government said Reeves would on Tuesday set out steps to “help protect working
people from unfair price rises,” including a new “anti-profiteering framework”
to “root out price gouging.”
But Starmer signaled strongly in an appearance before a Commons committee Monday
evening that he was not about to unveil any wide-ranging bailout package,
telling MPs he was “acutely aware” of what it had cost when then-Prime Minister
Liz Truss launched her own universal energy price guarantee in 2022.
O’Neill backed this approach, saying: “I don’t think they should do much… They
can’t afford it anyhow. The nation can’t keep shielding people from external
shocks.”
Weldon predicted, however, that as the May elections approach and the energy cap
deadline draws nearer, the pressure will prove too much and ministers could be
forced to step in.
The furlough scheme rolled out during the pandemic to project jobs and Truss’s
2022 intervention helped create “the expectation that the government should be
helping households,” he said.
“But it’s incredibly difficult. Britain’s growth has been blown off-course an
awful lot in the last 15 years by these sorts of shocks.”
Geoffrey Smith, Dan Bloom, Andrew McDonald and Sam Francis contributed to this
report.
Tag - Cost of living
PARIS — Socialist Emmanuel Grégoire is on course to become Paris’ next mayor,
extending his party’s quarter-century rule of the French capital, according to
multiple projections from pollsters.
The left-wing candidate is on track to win 53.1 percent of votes in Sunday’s
mayoral election runoff, per Ipsos’ initial estimate based on a partial vote
count.
His conservative adversary Rachida Dati is projected to come in second with 38
percent, while the hard-left candidate Sophia Chikirou is expected to come in
third with 8.9 percent.
His supporters in Paris were are celebrating, singing “Emmanuel” and“On a gagné”
(we won). After making a speech, he is expected to cycle to Paris city hall.
Grégoire finished the first round 12 points clear of Dati, but the runoff was
expected to be a tougher challenge after other right-wing candidates coalesced
behind Dati’s campaign. Two candidates who qualified for the second round, the
center-right former lawmaker Pierre-Yves Bournazel and far-right MEP Sarah
Knafo, both left the race to avoid splitting the vote.
Grégoire, however, chose not to team up with Chikirou on principle due to her
party’s abrasive, confrontational approach to the local election.
During the campaign, Grégoire, a protégé-turned-enemy of outgoing Mayor Anne
Hidalgo, focused his message on solving the housing shortage and bringing down
the cost of living. The 48-year-old had worked in Hidalgo’s administration for a
decade in various top roles, including as her main deputy from 2018 until 2024,
when he won a seat in the National Assembly.
But Grégoire and Hidalgo’s messy falling out forced the candidate to distance
himself from his former boss. That meant losing the opportunity to win votes by
boasting about the successful Paris Olympics or the transformation of the banks
of the Seine into a popular pedestrian area with cafés and restaurants.
The campaign got particularly heated ahead of the runoff, as he and Dati
attacked each other with vitriol. Grégoire also accused President Emmanuel
Macron of directly interfering to boost Dati, his former culture minister.
Macron strongly rejected the assertion.
LONDON — Britain’s Labour Party is paying a communications agency to find
influencers who can promote struggling Prime Minister Keir Starmer’s
cost-of-living message.
The governing party has tapped up digital communications agency 411 to reach out
to influencers, with the comms shop asking them to be part of a campaign
“sharing the steps that this Labour Government is taking to ease the cost of
living,” according to a message to influencers seen by POLITICO.
The creators are hand-picked “micro-influencers” with less than 20,000
followers, which 411 believes have a more engaged and targeted audience,
according to a person working on the strategy but not authorized to speak
publicly about it.
The influencers do not get paid by Labour or 411, with the same person
describing the outreach as akin to a targeted press release.
The quest for new messengers comes as Starmer’s government tries to convince
Brits it can reduce costs and fights to turn around dire poll ratings. At the
beginning of the year, Starmer announced that cutting the cost of living was his
“number one priority.”
His government has, however, repeatedly struggled with its communications, with
tanking poll ratings partially blamed by his own MPs on a failure to tell the
story of his administration. Starmer’s Downing Street has cycled through
multiple communications chiefs since taking office in July 2024.
Mark McVitie, who works on social media strategy as director of the Labour
Growth Group — though is not involved with the influencer outreach — described
the latest move as “tactically fine and what a government should be doing in
2026.” But he warned it is “insufficient to the level of the challenge facing
this particular government.”
The Labour Party did not respond to a request for comment.
The move is the latest by the British government to tap into the world of
influencers as it tries to push its message.
At the end of February, Starmer hosted a press conference solely for content
creators, while Chancellor Rachel Reeves booked out seats at a pre-budget press
conference for hand-picked online finance influencers. Starmer has started
posting podcast-style videos in recent weeks in a bid to more directly connect
with voters.
A Labour MP, discussing the bid to reach influencers and granted anonymity to
speak freely, said they were “delighted to discover we have a comms strategy of
any kind.”
CHÂLONS-EN-CHAMPAGNE, France — In rural Champagne, the National Rally is finding
the momentum and enthusiasm it needs to believe that it can win the French
presidency in 2027.
The first round of local elections on Sunday delivered mixed results for the
far-right party, highlighting how a decisive breakthrough still eludes Marine Le
Pen, Jordan Bardella and their allies in France’s biggest cities.
Despite strong performances in key southern cities like Marseille and Toulon,
where the National Rally scored 35 percent and 42 percent of the vote
respectively, the runoff this Sunday likely won’t be an emphatic victory given
how other movements have teamed up against the National Rally.
But the party’s leadership is relishing its growing popularity in Champagne and
other areas of France’s heartland where the moderate right formerly prevailed.
The National Rally candidate in the famed Champagne capital of Epernay garnered
31 percent of the vote, doubling the party’s score from the previous local
elections in 2020 partly thanks to higher turnout. And in the bucolic town of
Châlons-en-Champagne, 45 kilometers from the region’s largest city, Reims, the
far-right candidate came just a few hundred votes short of the first-place
finisher, incumbent Mayor Benoist Apparu, a minister under former President
Nicolas Sarkozy.
The dream is that combining growing rural support with the surging number of
far-right voters in the French sunbelt in addition to the National Rally’s
northern strongholds will be enough to deliver the poll-topping party their big
prize in the 2027 presidential election.
In rural Champagne country, the National Rally is finding the momentum and
enthusiasm it needs to believe that it can win the French presidency in 2027. |
Marion Solletty/POLITICO
“It is through these [local] roots that we will rebuild France, town by town,”
Le Pen said at a rally Wednesday on the outskirts of Châlons-en-Champagne. “The
great victory we are preparing for next year will not be handed to us, it will
be conquered.”
Speaking to a crowd of about 2,000 people in a mid-sized convention center, Le
Pen and other National Rally heavyweights framed the upcoming runoffs as another
example of President Emmanuel Macron and his allies trying to “ignore, if not
shut down people’s voice.” Many of the cross-party alliances that emerged after
the first round of the contest look poised to again block the party from winning
control of major cities in the runoffs this Sunday.
Lawmaker Laurent Jacobelli elicited cheers in the crowd when he slammed those
strategic partnerships as a “ménage à trois between Macronism, Socialism and the
fake right” on stage.
Ahead of the rally, a small gathering in the city’s historic center on Wednesday
gathered around 300 people protesting the National Rally’s presence, but they
were stopped by police before they could reach the rally’s venue.
UNITE THE RIGHT
In Reims, the National Rally landed a symbolic win this week when its candidate,
Anne-Sophie Frigout, merged with a center-right candidate, Stéphane Lang from
Les Républicains ahead of the runoff.
Such alliances, now openly called for by Bardella, used to be anathema for
centrist parties who have pledged to keep the National Rally at arm’s length.
“I am sure that this alliance is going to reproduce itself everywhere in the
weeks and months to come,” Anne-Sophie Frigout told POLITICO at the rally
between two selfies with local supporters. | Marion Solletty/POLITICO
“I am sure that this alliance is going to reproduce itself everywhere in the
weeks and months to come,” Frigout told POLITICO at the rally between two
selfies with local supporters. “This is what our voters are asking for here.”
The Reims merger is being touted by the National Rally and comes amid increasing
support for a union on the right. But whether the merger is indicative of a
greater trend within the ranks of Les Républicains remains to be seen.
Lang, who failed to qualify for the runoff, was immediately expelled from his
party for the rogue move. And given he and Frigout together scored 28.7 percent
of the vote in the first round, the alliance is unlikely to lead to victory.
Historically, the complex dynamic of ad hoc, last-minute alliances that shape
local elections in France’s two-round system has worked against the National
Rally, with the far right accusing the rest of the political class of conspiring
to keep it out of power.
But its leaders now hope they can break that glass ceiling ahead of next year’s
presidential race.
During his speech at the rally, Bardella’s message to France’s conservative
party was simple: “Join us,” he said.
“We are facing a wall that is being built against us,” Jacobelli told POLITICO
on the sidelines of the rally. “It is not a glass ceiling, it is a reflex of
self-preservation” from other parties.
The first round of local elections on Sunday delivered mixed results for the
poll-topping, far-right party, highlighting how a decisive breakthrough still
eludes Marine Le Pen, Jordan Bardella and their allies in France’s biggest
cities. | Marion Solletty/POLITICO
During Bardella’s speech, a small group overcome by enthusiasm chanted “Jor-dan
president, Jor-dan president” — forgetting for the moment that Marine Le Pen,
who had a front row seat to the scene, is still supposed to be their
presidential candidate pending a decision in her appeal of a five-year election
ban.
In the crowd, supporters vigorously approved both leaders’ odes to the working
class and their chastising of leftist firebrand Jean-Luc Mélenchon.
“If Mélenchon goes through, we lose France forever,” Jordan Delvallée, a
blue-eyed, 22-year-old mechanic who came to the rally with a younger friend.
“There is no better party than [the National Rally],” he said, even if
“everybody is against them.”
“The French get cold feet at second round because they are scared, but one
shouldn’t be afraid of change.”
The Bank of England warned it may have to take a tougher line on interest rates
as the spike in energy prices caused by the U.S.-Israeli war on Iran pushes
inflation higher.
“Monetary policy cannot reverse this shock” to world energy supply, Governor
Andrew Bailey said in a statement on Thursday, after the Monetary Policy
Committee voted unanimously to leave the Bank rate unchanged at 3.75 percent.
“Monetary policy must, however, respond to the risk of a more persistent effect
on U.K. consumer price inflation,” Bailey added.
The Bank had only last month declared victory over inflation, which has been
above its 2 percent target for over four years. However, its latest analysis
suggests headline inflation will rebound back above 3 percent in the next three
months and could add as much as 0.75 percentage points to the consumer price
index over the summer, as higher fuel bills percolate through the economy.
“The MPC is alert to the increased risk of domestic inflationary pressures
through second-round effects in wage and price-setting, the risk of which will
be greater the longer higher energy prices persist,” the Bank stressed. However,
it also acknowledged that the energy price spike is likely to hurt economic
growth, and that it is “assessing the implications for inflation of the
weakening in economic activity that is likely to result from higher energy
costs.”
Until the U.S. and Israel attacked Iran, most analysts had predicted that a
slowing economy and growing prospects of easing inflation would allow the MPC to
cut rates at Thursday’s meeting.
However, the invasion and the ensuing turmoil in world commodity markets have
turned the situation on its head, by closing a vital chokepoint at the mouth of
the Persian Gulf, through which irreplaceable volumes of oil, gas and fertilizer
pass every day.
As a result, the Bank warned that there is now a real threat of higher energy
prices causing a broader rise in prices across the economy. Food prices face a
similar risk.
ALREADY OUT OF DATE?
The situation is changing so fast that the Bank’s latest forecasts could already
be out of date. The Bank said they were based on the situation as of March 16,
when Brent oil futures were only at $100 a barrel. But a succession of strikes
on key energy installations around the Persian Gulf since then has already
pushed prices up by another 12 percent.
“The news flow around the war in Iran looks more worrying for global markets
with each passing day,” Deutsche Bank strategist Jim Reid said in a note on
Thursday.
Analysts argued ahead of the meeting that the Bank would prefer to err on the
side of keeping policy tight in the face of the new risks, given lingering
concerns about its credibility due to its slow response to the inflation shock
in 2022. Inflation peaked at 11.1 percent back then, the highest rate posted by
any major economy.
The Bank’s change in outlook will make life doubly uncomfortable for the Labour
government, which had hoped that its efforts to close the U.K. budget deficit
would be rewarded with lower inflation and lower interest rates.
Instead, the government’s key 10-year borrowing costs have risen by nearly half
a percentage point since the war started, and they leaped again on Thursday,
first in response to Iranian attacks on a Qatari gas field, then to the BoE’s
statement. At 4.89 percent, the 10-year gilt yield is now at its highest in 15
months. The pound, by contrast, was steady against the dollar and euro after the
decision.
The Office for Budget Responsibility earlier this month already cut its
forecasts for U.K. growth this year. That implies lower tax receipts which,
combined with higher borrowing costs, threaten a new two-way squeeze on
Chancellor Rachel Reeves’ fiscal arithmetic, less than six months after she had
to raise taxes sharply at her latest budget.
A blue wave may already be cresting.
Democrats have flipped 28 Republican-held seats in state legislatures across the
country over the past 14 months, a sign that the GOP is indeed at risk of losing
control of the House, and maybe even the Senate, in the midterms.
Democratic wins have come even in deep red states, including Texas, Arkansas and
Mississippi, and often by margins that make Republican leaders uneasy.
“I’m ringing the alarm bell,” said Brendan Steinhauser, a Texas GOP consultant
who has run campaigns for Republicans in the state, including Sen. John Cornyn
and Rep. Dan Crenshaw.
The results of these state-level elections reflect the immediate concerns of the
electorate, provide a launching pad for the next generation of national leaders
and could influence the future makeup of Congress through redistricting. They
may also give both Republicans and Democrats a preview of the midterm battles to
come.
For Republicans, the results are a sign that they must do more to motivate
low-propensity voters who helped carry President Donald Trump back to the White
House, said a senior GOP campaign operative, who was granted anonymity because
he didn’t have permission from the party to speak freely about the losses.
“We’re the party of low propensity voters now,” said the operative. “How do we
turn out these Republican voters in a midterm election?”
One of the first signs that Democrats were building momentum came in August,
when an Iowa Senate district swung more than 20 points to elect Democrat Catelin
Drey. It was the second seat Democrats flipped in the state last year, and the
moment that broke the Republican Senate supermajority in the General Assembly.
Then in November, Democrats did it again: They flipped three of the six
Republican-held districts in a Mississippi special election, again breaking a
GOP Senate supermajority.
“You are seeing people just vote for change,” said Brian Robinson, a GOP
consultant in Georgia, where Republicans lost a seat in December.
Robinson, an outside adviser for the state House GOP caucus, says Republicans
are blamed for high prices because they’re in charge.
“If it’s any one thing, it is [the] cost of living.” Robinson said, arguing that
Trump will do something to reduce prices before the midterms. In recent weeks,
the president has indeed taken steps, including by touting a pledge from tech
companies to reduce energy costs associated with data centers and releasing 172
million barrels of oil from the Strategic Petroleum Reserve. The Iran war, which
has sent global oil prices skyrocketing, complicates that effort.
After Democrats flipped 13 Virginia seats and five New Jersey seats in November,
the Democratic Legislative Campaign Committee went back to reassess state races
around the country. They expanded their 2026 target map to 42 chambers and
invested $50 million in changing the makeup of state legislatures — the widest
map and largest single-year budget DLCC has ever approved.
Legislatures in Arizona and New Hampshire are now on the “flip” list, and the
DLCC hopes to break or prevent GOP supermajorities in red states across the
South and Midwest. Their success could give Democrats more state power over
judicial nominees, protect the veto power of Democratic governors in states with
GOP-led legislatures and hand Democrats greater influence over redistricting.
Republicans, meanwhile, are waiting for the funding to hit. As of January, the
RNC has just over $100 million and Trump’s MAGA Inc. PAC has $300 million. State
Republicans say when that cash flows into midterm races, it will enable them to
get low-propensity voters to vote.
Turnout was a major point of discussion at an RNC conference call that Wisconsin
GOP Chair Brian Schimming attended Tuesday, and he says Republicans will
dedicate a lot of resources to motivate voters in November.
“We’ve met with the White House more than once, and they keep track of the
target states pretty closely,” said Schimming, adding he also expects Trump and
Vice President JD Vance to stump in key Wisconsin congressional districts closer
to the election. “They are big base motivators.”
In the meantime, Democrats keep flipping state seats. The latest came Tuesday
night, when Bobbi Boudman beat Republican Rep. Dale Fincher in a New Hampshire
Senate seat that Trump won by 9 points.
On March 24, voters will decide in a special election who represents the Florida
state House seat that includes Mar-a-Lago. Democrat Emily Gregory, a small
business owner who is running against Republican Jon Maples, a businessman, saw
her total campaign earnings jump by nearly 75 percent between Jan. 9 and Feb.
12.
In November, a national PAC connected Gregory with Drey, who flipped the Iowa
seat in August. Drey advised Gregory to find the affordability issue that
matters most to her district — the way energy costs resonate in New Jersey and
property insurance does in Florida.
“In this moment, we have all of the issues on our side. We have all of the
momentum on our side,” Gregory recalled Drey telling her. “It’s just up to you
as a candidate to get in front of every single voter you can and communicate
that message.”
PARIS — Emmanuel Grégoire should have had an easy campaign to succeed his former
boss, Paris Mayor Anne Hidalgo.
But the pair’s very public political breakup is creating a major obstacle for
the Socialist front-runner in the lead-up to the race to lead the French
capital, which begins on Sunday.
Since their clash, Grégoire has conspicuously distanced himself from Hidalgo,
and that has meant losing the opportunity to win votes by boasting about the
successful Paris Olympics or the transformation of the banks of the Seine into a
popular pedestrian area with cafés and restaurants.
If Grégoire fails to extend the Socialists’ quarter-century rule of Paris, it
would be a disaster for his party and further evidence of its weakness before
the country’s presidential election next year.
“She did everything she could to torpedo my candidacy. I’m not her candidate and
I am not her heir,” Grégoire said in a February interview with
franceinfo. That’s a spectacular rupture for the man who was her principal
deputy from 2018 to 2024.
The race is going to be close, giving the right its best opportunity in years to
take control of the City of Lights — if it can unite around one candidate.
Grégoire and conservative former Culture Minister Rachida Dati are running
neck-and-neck for the top spot in the polls. But an unprecedented five
candidates could make the runoff on March 22, which would trigger a mad scramble
for alliances.
PARIS LOCAL ELECTION POLL OF POLLS
All 3 Years 2 Years 1 Year 6 Months Smooth Kalman
For more polling data from across Europe visit POLITICO Poll of Polls.
A BUNGLED SUCCESSION
So what happened between Hidalgo, the chief architect of the French capital’s
green revolution, and Grégoire, her once-presumed heir?
Over the summer, Hidalgo spurned his candidacy to support a lesser-known
senator to succeed her as mayor.
Grégoire still wound up winning the Socialist Party’s nomination, but the damage
was done after Hidalgo publicly claimed that “the left would lose” Paris if her
former deputy was its candidate.
Three people familiar with their relationship, all granted anonymity to speak
candidly, said things started to turn sour after Hidalgo’s failed 2022
presidential bid, in which she won a dismal 1.75 percent of the vote.
With Hidalgo’s fortunes waning and Grégoire seemingly tapped as her replacement,
things started to get “complicated,” an official in the Socialist Party said.
The pace of change and Anne Hidalgo’s disregard for her critics has not helped
her popularity. | Ludovic Marin/AFP via Getty Images
“She has an authoritarian streak and was really hard on him,” the official
said.
This is a trait that has widely been remarked upon, and it earned her the
nickname “Queen-Mayor.” It helped with short-term implementation of projects but
now looks like it could have undermined her party in the long run, given some of
the bad blood it has fomented.
“You need toughness to succeed in Paris and transform the city,” said Gaspard
Gantzer, a former Paris City Hall advisor. “Her style was a bit brutal, a bit
cutting with others.”
Hidalgo was then furious when Grégoire ran for and won a parliamentary seat
representing Paris during the 2024 election, according to two of the three
people familiar with the relationship.
One of Hidalgo’s allies said “they were both at fault,” as Grégoire became less
supportive of her political ambitions and started pursuing his own agenda after
the last presidential race.
“It was a classic leader versus heir situation,” the Hidalgo supporter said.
‘A DIFFERENT MAYOR’
Asked about the feud by POLITICO when unveiling his platform to reporters last
month, Grégoire said he has fond memories of working with Hidalgo but stressed
he would be “a different mayor” who would address “the new expectations” of
Paris residents.
Grégoire has instead tried to take a page out of Zoran Mamdani’s New York
playbook, focusing his message on housing shortages and bringing down the cost
of living. He’s also promised to “break with [Hidalgo’s] method.”
While Grégoire hasn’t exactly broken through in the polls, the strategy could
reap benefits given the Europe-wide anti-green backlash and Hidalgo’s reputation
among resident of the capital.
A poll from Ipsos published in December found that Hidalgo leaves office with a
legacy that splits Parisians, even if they have come to love biking to work or
enjoying more open space.
The pace of change and Hidalgo’s disregard for her critics has made her
divisive, even losing some support among those proud of the Olympics and Paris
becoming a global showcase for urban transformation. Hidalgo’s missteps added to
the resentment, whether that focused on ill-designed bike lanes, several
abandoned urban forests or the endless redevelopment of the Eiffel Tower
gardens.
“She would make a huge announcement and then wait for her teams to comply,” said
Paris urban policy expert Stephane Kirkland, who has worked for firms involved
in Paris city projects. “It was a my-way-or-the-highway approach.”
Rachida Dati has tried to seize on public dissatisfaction with City
Hall by linking Grégoire to Hidalgo. | Ludovic Marin/AFP via Getty Images
Kirkland said that Grégoire’s campaign has clearly “internalized the new
dynamic” against green issues and exasperation with Hidalgo.
Grégoire “isn’t talking about anything green, even if his coalition includes
green parties. He is really focused on social issues, security and cleanliness,”
Kirkland said.
Dati, the conservative challenger, has tried to seize on public
dissatisfaction with City Hall by linking Grégoire to Hidalgo and accusing the
duo of turning Paris into a dirty, disorganized, never-ending construction
site.
There are limits to that strategy, though. Not even Dati wants to reverse course
on pedestrian zones like those on the banks of the Seine.
Aitor Hernández-Morales contributed to this report.
LONDON — Keir Starmer knows the war in Iran could sink his number one domestic
mission: Cutting the cost of living.
But unfortunately for him, the man with most power to stop the conflict
seems not to be in a hurry.
The U.K. prime minister was more explicit than ever on Wednesday that he wants
to see “de-escalation” in the Middle East — in part because it’s the surest way
of stopping energy bills skyrocketing in his own country.
Starmer said his government was “working around the clock” to ensure consumer
and business costs don’t soar, after being challenged in the House of Commons
over fears that disrupted oil and gas flows from the Gulf are spiking gasoline
prices and could hike home energy bills, too.
“The most important thing, the most effective thing we can do,” he told MPs, “is
to work with our allies to find a way to de-escalate the situation” in the
Middle East.
That might prove … tricky.
While Donald Trump faces his own domestic drama over high prices at the pump,
the White House is showing no signs of seeking an immediate resolution to the
conflict.
The Trump administration believes it can withstand a spike in oil prices for as
many as four weeks before the political pain starts to bite, POLITICO has
reported.
That timeframe — should it be borne out — is laden with risk of further
escalation in the region, and carries major domestic political risk for
Starmer, over an issue that remains the public’s number one priority.
BALANCING ACT
“While the public are deeply concerned about events in the Middle East and
implications for international security, those concerns are dwarfed by worries
about the cost of living,” said pollster Luke Tryl, director of the More in
Common think tank.
“The prime minister has so far managed to stay on the right side of public
opinion on the war, with the median Brit supporting Starmer’s position of
allowing the use of U.K. bases purely for defensive strikes,” Tryl added.
“However, the balancing act between maintaining a good relationship with the
United States and being able to show he is doing everything he can to stop the
war leading to another spike in the cost of living is a tricky one.”
The Trump administration believes it can withstand a spike in oil prices for as
many as four weeks before the political pain starts to bite, POLITICO has
reported. | Celal Gunes/Anadolu via Getty Images
There’s also a Catch-22. Efforts by Starmer and other European leaders to
mitigate the war’s impact on the global economy might help persuade Trump
he need not hurry U.S. withdrawal from the Gulf.
America’s allies confirmed Wednesday they would coordinate — via the
International Energy Agency (IEA)— release of a record 400 million barrels of
oil from their strategic reserves. Even before it was confirmed, expectation of
this move helped temper oil price rises.
The next big decision could center on the Strait of Hormuz, a key trade route
largely closed to oil and gas shipping since the crisis began.
While welcoming agreement on the release of strategic reserves, IEA Executive
Director Fatih Birol said: “The most important thing for a return to stable
flows of oil and gas is the resumption of transit” through the Strait.
Starmer’s Chancellor Rachel Reeves told MPs on Wednesday the “root cause” of the
U.K.’s cost-of-living concerns “is the challenge in getting oil and gas out of
the Middle East.” The government would “work flat-out” to de-escalate the
conflict and “get vessels moving again in the Strait of Hormuz,” she said.
Precisely what that means in practice — or whether the U.K. or other American
allies could police Hormuz without getting involved in U.S. and Israeli
offensive operations against Iran — is unclear.
Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio
Monday, according to U.K. officials, who said they discussed their “desire to
see a swift resolution that supports stability in the Middle East and protects
the global economy.”
MOMENT OF MAXIMUM DANGER
So far, U.K. household energy bills — significantly influenced by wholesale gas
prices — have been spared the price spike, which has been driven by both the
effective closure of the Strait and by Iranian attacks on energy production in
Gulf countries. The most notable attack was against QatarEnergy, a major
liquefied natural gas exporter, which has suspended production.
U.K. gas and electricity costs are determined using a regulated price updated
every three months, and prices until June are already locked in.
But the longer the war goes on, the bigger the impact will be when the price cap
is set for July to September — and beyond.
Reeves told MPs on Wednesday it is “much too early, less than two weeks into the
conflict, to have any certainty about what things will look like when the next
energy price cap is determined, at the end of May, for July.”
But for a government that has promised to cut energy bills £300 by 2030, the
longer the war, the bleaker that moment in May could be.
Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio
Monday, according to U.K. officials, who said they discussed their “desire to
see a swift resolution that supports stability in the Middle East and protects
the global economy.” | Justin Tallis/AFP via Getty images
Hence Starmer’s increasingly urgent focus on somehow persuading the U.S. and
Israel to draw back. That task won’t be made any easier by deteriorating
relations with Trump, who last week, in a row over U.S. access to U.K. military
bases, dismissed Starmer as “not Winston Churchill.”
“The most important issue is de-escalating the situation,” Starmer told MPs
Wednesday, reiterating that the U.K. “should not join the war in Iran” and would
only carry out defensive military operations in the region to “protect British
lives and the British national interest.”
For the prime minister — hanging onto office by a thread even before the
conflict — it could yet prove be existential.
“For all the support for Starmer in navigating the conflict so far,” said Tryl,
“if people start to feel the impact in their pockets and bills, the demand for
change which has already tanked his poll ratings will likely only grow.”
Additional reporting by Esther Webber.
THE GOLDEN TRIANGLE: CAN 3 TOP OFFICIALS SAVE THE BRITISH ESTABLISHMENT FROM
ITSELF?
They run Keir Starmer’s office, the king’s business, and the civil service. In
moments of crisis when the politicians can’t cope, they run Britain, too.
By TIM ROSS
in London
Illustration by Natália Delgado/ POLITICO
In the heart of historic Westminster, where kings and queens have been crowned
in the same way for 1,000 years and 57 prime ministers have come and gone, the
most venerable pillars of the British establishment are under unusual strain.
The swirling international scandal over sex offender Jeffrey Epstein’s network
of wealth and influence detonated violently in the heart of the U.K. government,
rocking both the center of power in Number 10 Downing Street and the British
royal family.
Prime Minister Keir Starmer is clinging onto his job amid dire polling, wretched
election results and an outcry over his decision to appoint Epstein’s friend
Peter Mandelson as ambassador to Washington. The scandal already forced his
closest aide to resign.
And King Charles III is trying to prevent his disgraced brother Andrew
Mountbatten-Windsor’s friendship with Epstein from trashing the British monarchy
itself.
Behind the scenes, three dutiful civil servants now find themselves in pivotal
roles, trying to guide the prime minister, the king, and hundreds of thousands
of public officials through an unprecedented storm. Together, this trio forms
what is known as the “golden triangle” at the top of the British state — and if
they can’t keep the establishment afloat, no one can.
The three are: Dan York-Smith, Starmer’s principal private secretary, who runs
the PM’s Downing Street office; Clive Alderton, the king’s principal private
secretary, who is the main link between the monarch and the government; and
Antonia Romeo, who recently took up her post as Cabinet secretary — the most
powerful civil servant in the country.
Each of these jobs is intense at the best of times. With fresh Epstein
revelations expected to compound the pressure from the Middle East war, they’re
all likely about to get even harder.
Peter Mandelson has promised to cooperate with the police and vowed to clear his
name. | Jordan Pettitt/PA Images via Getty Images
In the coming days, the government is preparing to publish a vast trove of
internal documents detailing all the private conversations and messages between
officials, diplomats and ministers that led up to Mandelson’s appointment as
ambassador to Washington, in December 2024. After that, at some point, every
internal file relating to Mountbatten-Windsor’s appointment as a U.K. trade
envoy more than 20 years ago will also be put into the public domain.
“The most challenging thing will be the release of information — and what that
reveals,” said Alex Thomas, a former senior government official and now
executive director of the Institute for Government think tank in London. “That’s
the moment of jeopardy for the government, for the royal family, and for the
civil service.”
At stake, potentially, is the credibility of the British
establishment. Mandelson and Mountbatten-Windsor have each separately been
arrested on suspicion of misconduct in public office. If either were to be
charged and put on trial, the resulting publicity could be hugely damaging for
the monarchy and the government.
Mandelson has promised to cooperate with the police and vowed to clear his name.
He has previously said he was wrong to have continued his association with
Epstein, who died in 2019, and apologized “unequivocally” to Epstein’s victims.
Mountbatten-Windsor has not commented on his arrest but has previously denied
any wrongdoing.
“Much of the stability in our political system comes from a strong civil service
and a strong monarchy,” said Cameron Brown, a former special adviser in the
previous Conservative government. “If people lose faith in either institution,
then god knows what will happen.”
YORK-SMITH: ONE CRISIS…
It’s a good job, then, that each one of the three members of the golden triangle
has been blooded in crises, and survived — even if their bosses at the time did
not.
York-Smith rose to seniority in the Treasury as the top official in charge of
writing the government’s annual budget, an exercise in balancing highly
contentious and competing demands, and then keeping them secret until they are
announced.
While his background in fiscal policy will no doubt have helped make York-Smith
an attractive hire for Starmer, who has sought to prioritize tackling the cost
of living, what may ultimately prove more valuable is the official’s experience
in one of the worst self-inflicted economic crises to hit the British government
in recent memory: Liz Truss’s infamous “mini-budget” of 2022.
“Dan played a key role in the stabilization phase,” said Brown, a special
advisor in the Treasury at the time. “He was quite frank about what we needed to
do.” That meant scrapping key parts of Truss’s tax-cutting program, which had
sent the markets into meltdown and forced her to fire her chancellor, Kwasi
Kwarteng. His replacement as the U.K.’s top finance minister, Jeremy Hunt,
listened closely to York-Smith and other officials and took their advice, Brown
said.
That was typical for York-Smith, whose natural authority, intelligence and
composure gave him influence.
“I always found him to be exceptionally calm, cool-headed, personable and
ultimately an intelligent guy. He’s more than capable and is very good at
identifying problems — not just policy problems but his view of the political
problems as well,” Brown said.
ROMEO: BREAKING SOME EGGS
There was an unusually stormy and public debate about whether Romeo was the
right person to take over as Cabinet secretary. But Starmer went ahead and
appointed her last month, in the hope that a dynamic new leader would kickstart
the civil service machine to deliver on his aims — and rescue his flagging
premiership.
“The U.K. is in a mess — there’s a lot going on, and it kind of needs someone
who’s going to get the bloody job done,” one former colleague of Romeo’s said,
speaking on condition of anonymity, like others, to discuss sensitive matters.
“Breaking a few eggs might not be a bad thing.”
Romeo has grappled with major political crises in her previous roles, too.
In her time as the top official in the Ministry of Justice (MoJ), she had to
deal with bullying allegations against the minister in charge, Justice Secretary
Dominic Raab, in the previous Tory government.
Keir Starmer appointed Romeo last month, in the hope that a dynamic new leader
would kickstart the civil service machine to deliver on his aims — and rescue
his flagging premiership. | Kin Cheung/Getty Images
Romeo’s allies point to her determination to stand up for more junior officials
who felt badly treated under Raab. She kept a crucial record of conversations in
which she had warned Raab about his behavior, which ultimately contributed to an
inquiry finding the minister guilty of “aggressive” and “intimidating” behavior
toward officials, prompting him to resign.
Romeo also had to handle a prison crisis, when the country’s jails were so full
that ministers released about 3,000 prisoners early in September and October
2024 to avoid running out of places.
“Antonia has always done incredibly demanding and challenging jobs — from
overseeing national security at the Home Office to dealing with the prison
crisis at MoJ,” one government official said. “So while this is in at the deep
end — alongside the war in Iran and rapidly re-wiring the state — this is what
she does.”
ALDERTON: THE KING’S MAN
Romeo also has experience of working with Buckingham Palace, which is a key
relationship for the Cabinet secretary. In her previous role as clerk of the
Crown in Chancery, she compiled the official state record of Charles’s
coronation in 2023, known as the coronation roll. It’s a tradition dating back
over 700 years.
Then there is the adviser to the king. Alderton is the monarch’s closest and
most influential aide, a former ambassador who has been by Charles’ side since
2015. Those who know him describe him as the kind of classic British official
who will always offer you a cup of tea and has perfected the art of chatting
amiably for hours without saying much of substance. In other words, he is
studiously loyal and determinedly safe.
Media reports identified him as Prince Harry’s nemesis, referred to as “the
wasp.” Harry’s supporters are reported to blame Alderton for the rift between
the king and his son. What is certainly true is that it will have fallen to
Alderton to help Charles navigate that painful relationship and the fallout from
Harry’s decision to step back from his royal duties and live overseas.
Alderton is the monarch’s closest and most influential aide, a former ambassador
who has been by Charles’ side since 2015. | Aaron Chown/Getty Images
These three top officials — Alderton, Romeo and York-Smith — do not comprise a
formal group but are in contact whenever necessary, senior officials said. In a
real crisis, or when preparing for one, they will speak to each other
continuously.
For example, when a hung parliament was expected ahead of the 2015 general
election, the then Cabinet Secretary Jeremy Heywood booked office space inside
the Cabinet Office for the late queen Elizabeth’s private secretary, Christopher
Geidt, so he could be permanently available to discuss constitutional questions
during coalition talks between the political parties. (In the end the
Conservatives won a clear majority and no talks were needed.)
Heywood also consulted with the palace in June 2017, when Theresa May suffered a
humiliating election failure in which she lost her party’s majority. He had to
tell her she should stay on as prime minister and seek to form a majority of MPs
in Parliament who would back her government, as she was still leader of the
largest party, even though her Conservatives had lost seats.
Thomas, from the Institute for Government, remembers working alongside Heywood
at that intense time in 2017, helping prepare the first cabinet meeting and
trying to work out an appropriate seating plan when emotions were running
high. “Part of that value of the permanent civil service is you can have
someone, when the politics has collapsed around you, who can come in and say:
‘This is the defensible, correct thing to do,’” Thomas said. “In the end it’s
about keeping your head, if you’re cabinet secretary.”
PROTECTING ‘THE SYSTEM’
The three officials’ objectives vary and there is sometimes room for tension,
especially when the personal desires of the royals clash with the political
requirements of the government.
York-Smith focuses on the day-to-day business of running Downing Street as
smoothly as possible. Alderton, meanwhile, prioritizes the monarch’s interests,
which may be more personal — the royal family is still a family — as well as
constitutional.
Romeo takes a view on longer-term government strategy, delivering for the prime
minister, and preserving constitutional conventions — which require the civil
service she runs to make sure the king is never dragged into party politics.
“That relationship between the Cabinet secretary, the prime minister’s PPS and
Buckingham Palace is critical and I’m sure there’s a constant line of
communication between the three power-brokers,” said Brown, who was a political
adviser rather than a permanent civil servant.
“It’s not something they ever want to show to politicians: It’s a steady
constant that keeps the cogs of government going … Much of the civil service is
designed to keep the system operating and to preserve the status quo and to
prevent embarrassment to the system itself — and their loyalty is to the
system.”
Whatever the advice of officials, the big decisions remain for the elected
politicians to take. And that means the prime minister, who is,
constitutionally, the monarch’s first and most senior adviser. According to
Thomas, the “golden triangle” name risks inflating the significance of the
group. “These are people doing difficult jobs and trying to get through the
day,” he said.
“But that’s not to downplay the importance of any of those jobs, or the
relationship working well,” said Thomas. “There are very rare but important
moments when it’s not so much for those three people to decide what to do, but
it is for them almost to be the keepers of the legitimate process of getting
from A to B.”
When times are good and the government, royal family and prime minister are
secure in their positions, the members of the golden triangle offer their advice
and leave it to their leaders to decide.
But in the hardest moments, they must be ready to step up, on behalf of the
long-established way in which things in Britain are done. So far, at least, that
has been enough to keep the system alive.
Esther Webber contributed reporting.
LONDON — Britain must “back the Americans in this vital fight against Iran!”
said Reform UK Leader Nigel Farage the day the war began.
Less than two weeks on and he’s changed his tune. We “don’t have a Navy” and
“cannot get involved directly in another foreign war,” Farage told a press
conference on Tuesday.
What’s changed? An energy shock.
When the conflict had just started, and before it — predictably — sent oil and
gas prices soaring and became a cost-of-living issue, he was all for it.
But as soon as it threatened to hit British voters in their pockets, and proved
deeply unpopular in polls of normal Brits, he went all wobbly.
Some of Farage’s political opponents are determined not to let the populist
leader distance himself from his original enthusiasm.
“Trying to pull the wool over our eyes,” said Green Party Leader Zack Polanski
on Tuesday, responding to an X post in which Farage’s Treasury spokesperson,
Robert Jenrick, said the “war needs to come to an end as soon as possible,
because it is making Britain poorer.”
Having initially backed the conflict, Reform, said Polanski, is now “the party
of foreign wars and higher bills.”
Liberal Democrat Leader Ed Davey has taken a similar tack, telling the BBC on
Monday that voters worried about the war’s effect on the cost of living should
remember that Farage’s Reform, like the Conservative’s Kemi Badenoch, “cheered
on Donald Trump.”
Farage insisted Tuesday there’s no inconsistency, and that his original position
had merely been that Prime Minister Keir Starmer should have allowed U.S. forces
to launch attacks on Iran from U.K. bases from the outset of the conflict, not
necessarily that the U.K. should join attacks on Iran.
But the shift in tone reveals something fundamental about British politics in
2026: The cost of living is everything. A war that threatens to send it even
higher always had the potential to prove unpopular.
“The public are deeply uneasy about what they think could be unnecessary and
costly involvement in foreign wars, [and have] significant hesitations about too
close an alignment with President Trump,” said pollster Scarlett Maguire,
director of Merlin Strategy.
Ed Miliband posted a video seeking to “reassure” voters that the “cost of living
crisis remains our number one priority — because its yours.” | Sean Gallup/Getty
Images
“The cost of living crisis in this country only exacerbates this, with voters
already feeling that the government are not doing enough to bring down energy
prices and inflation,” she added.
On Tuesday, Farage and Jenrick attempted to flip the narrative by blaming “a
ruinous climate agenda” for high energy costs in the U.K. The two unveiled a
pledge not to increase taxes on gasoline, a promise they would pay for by
scrapping green spending on heat pumps and carbon capture technology.
And the Reform UK leader downplayed the impact of the war on oil and gas prices.
“If the Straits of Hormuz are cleared — I accept that’s an ‘if’ — oil will be
back into the low 80s [dollars per barrel],” predicted Farage at the event at
service station Derbyshire. But he was challenged by a local news reporter, who
noted that a third of people in the local area use heating oil to warm their
homes — and are already seeing prices rise.
The Labour government has, so far, been cautious not to attack Reform or the
Conservatives too fiercely for their initial stance on the war, wary of driving
a further wedge between Downing Street and the White House.
But they are seeking to portray themselves as the grown-ups in the room,
laser-focused on the cost of living. Energy Secretary Ed Miliband posted an
uncharacteristically sober video message to social media on Tuesday, seeking to
“reassure” voters that the “cost of living crisis remains our number one
priority — because its yours.”
Despite its own missteps over the Iran war, that’s a message Starmer’s
government will be desperate to land, as the conflict’s shockwaves continue to
hit Britain’s shores.
Noah Keate contributed to this report.