Sunak’s UK election gamble

After UK Prime Minister Rishi Sunak called an early general election for July 4, the real question may not be whether the opposition Labour party wins, but by how much [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Exactly six weeks from today — or around 1,000 hours if you’re really counting down — the UK will hold a general election. After 14 years of Conservative rule that brought five prime ministers, Brexit, Boris Johnson’s chaotic Covid-era premiership and the market-roiling 49-day tenure of Liz Truss, [every opinion poll now suggests]( Labour’s Keir Starmer will replace Rishi Sunak as premier. Almost all observers [expect Labour to win](. That means that while Sunak will still be in charge when Group of Seven leaders meet in Italy next month, it could be Starmer representing Britain at the NATO summit in Washington just five days after the July 4 ballot. WATCH: Bloomberg’s Lizzy Burden reports from Westminster on Sunak’s election gamble. Starmer’s [message to voters](, investors and other world leaders will be that Britain needs “change” and then “stability” after the political and economic turmoil of recent years. Labour will preach caution on public spending, aim to look strong on national security and pledge closer ties with Europe. They’ll even try to make friends with Donald Trump. Sunak will try to avoid a landslide defeat by urging voters to “stick to the plan” he says is delivering an economic recovery that’s [only just picking up](. He’ll promise more tax cuts and try to create a dividing line with Labour on migration by vowing to send asylum seekers to Rwanda. Sunak has so far failed to improve Tory polling fortunes during his 18 months in office, [privately admitting]( that winning would be “the greatest comeback in political history.” The real question on July 4 may not be whether Labour wins, but by how much.— [Alex Wickham]( Keir Starmer. Photographer: Chris Ratcliffe/Bloomberg Global Must Reads China’s most expansive military drills in a year around Taiwan today were designed to “serve as a strong punishment” for [alleged separatist acts]( and “provocation by external forces,” according to the official Xinhua News Agency. They come just days after Lai Ching-te took over as president of the island that Beijing claims as part of its territory. Meanwhile, China, Japan and South Korea [are set to hold]( their first summit in more than four years in Seoul next week. The foreign dignitaries attending President Ebrahim Raisi’s funeral yesterday showed how Iran’s efforts to [blunt US sanctions]( have paid off. The attendance of the foreign ministers of Saudi Arabia, the United Arab Emirates and Bahrain alongside leaders of US-designated terrorist groups Hamas and Hezbollah testified to Tehran’s work to repair ties with major US-allied Arab countries. A truck carrying Raisi’s coffin in Tehran yesterday. Photographer: Morteza Nikoubazl/NurPhoto/Getty Images Infighting among some of Europe’s far-right parties has thrown pre-election campaigning into turmoil, [threatening their chances]( of emerging from the June 6-9 European Parliament vote with enough leverage to further their agendas. A rupture between Marine Le Pen’s National Rally in France and the Alternative for Germany showed that rightist forces [don’t form a cohesive bloc](. Calling for calm, French President Emmanuel Macron arrived in New Caledonia after days of protests sparked by a proposed change to the electoral franchise. The Pacific territory of 270,000 people has been in turmoil since May 13, [when violence erupted over plans]( to extend voting rights to more residents, which indigenous Kanaks say would diminish their electoral influence. Indian Prime Minister Narendra Modi said his Bharatiya Janata Party has [already won a majority]( of the seats contested in parliamentary elections due to end next week, putting him in a position to return to office for a third term. Modi said the BJP had made significant gains in the southern and eastern parts of the country; the six-week ballot comes to an end on June 1, with results due to be published on June 4. Israel said it would revive stalled cease-fire talks with Hamas after a social media video showing female Israeli soldiers being abducted by the militants on Oct. 7 [sparked a public outcry](. South African financial markets are brimming with optimism, [indicating a widespread belief]( among investors that stocks, bonds and the rand will keep gaining after the May 29 election. Thailand’s Constitutional Court accepted a petition by a group of senators seeking to remove Srettha Thavisin as prime minister [on ethical grounds]( over the controversial appointment of a cabinet minister, but allowed the premier to perform his duties until it rules on the case. Washington Dispatch President Joe Biden will host a state dinner at the White House tonight for President William Ruto of Kenya. It’s [the first such event]( for an African leader in 16 years, and comes as the US has been highlighting a renewed commitment to the continent. Many African leaders have expressed skepticism over the public attention, and have accused both Republican and Democratic administrations of neglect. This new effort comes with greater urgency as Russia, China and other countries have been acquiring greater influence in Africa. Ruto will be able to boast of some accomplishments when he returns to Nairobi. The Biden administration is [proposing to make Kenya]( the first country in Africa to benefit from funding in the Chips and Science Act. And today the US International Development Finance Corporation, which loans to private firms rather than governments, plans to announce several hundred million dollars in new investments in Kenya, bringing its portfolio in the country to more than $1 billion, according to a US government official. One thing to watch today: The pace of new home sales is expected to have declined by about 2% in April due to the increase in mortgage rates during the month. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Despite a trajectory of rising debt and the International Monetary Fund’s assertion last month that “now is the time” to restore sustainable budget policies, the subject doesn’t appear on the formal agenda for Group of Seven finance ministers gathering in the northern Italian lakeside town of Stresa from today. The topic’s sensitivity isn’t surprising given coming elections in the US, UK and European Union — and a precarious fiscal situation in Italy, the host nation. Even so, with high borrowing costs hurting and debt increasing, the lack of a collective resolve [risks storing up trouble](. And Finally The Aland Islands — a self-governing archipelago stretching across the middle of the Baltic Sea — officially belong to Finland, residents speak Swedish, and Russia is tasked with enforcing an accord that has banned any military presence for more than a century. With Finland now a member of NATO and Russia jostling to assert its rights in the region, hawks say the unusual set up has become [the Nordic country’s greatest vulnerability](, potentially giving the Kremlin an open field [should it ever decide to invade](. The Aland Islands. Photographer: Alessandro Rampazzo/AFP/Getty Images More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? 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