Danger lurks behind Labour’s win

Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here.Keir Starmer led the Labour Party [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. Keir Starmer led the Labour Party to [an emphatic victory]( in the UK, ending 14 years of Conservative rule in a landslide second only to Tony Blair’s win in 1997. No surprises there, if you were watching the polls. The reaffirmation of internationalist, NATO-backing leadership in a Group of Seven economy will give some comfort to centrists shaken by rising electoral support for the likes of Donald Trump and Marine Le Pen. That said, [the red wave]( that swept across Britain concealed a fracturing political landscape not dissimilar to those in the US and France. WATCH: Alex Morgan takes a look at the key policy plans of Starmer and Rachel Reeves, who’s set to become chancellor.  Source: Bloomberg Starmer’s victory stemmed in part from [a surge in support]( for Brexit-campaigner Nigel Farage’s anti-immigration Reform UK, which siphoned off once-loyal Tory votes. The party received some 14% of the vote, though only won four seats in Parliament under Britain’s first-past-the-post voting system. One of those was Farage himself, becoming an MP on his eighth attempt. He has pledged to take over the right of British politics in a bid to be prime minister by 2029. “We’re coming for Labour,” Farage said after his win in the pro-Brexit coastal town of Clacton. With turnout at a 100-year low, the election showed widespread disaffection with the political status quo. Minor parties, including the third-placed Liberal Democrats, saw their combined vote share rise to the highest level since at least 1918. Starmer [alluded to the challenge]( in a victory speech early today. “Make no mistake,” he told cheering supporters, “the fight for trust is the battle that defines our age.” After slumping to a historic defeat, the Conservatives face a period of intense soul-searching about where they went wrong and the direction they take to rebuild support. Labour now takes on the challenge of tackling Britain’s strained finances, crumbling public services and surging immigration. Starmer’s honeymoon as prime minister may be short. — [Brendan Scott]( and [Isabella Ward]( Farage reacts after the results for the Clacton constituency are announced. Photographer: Chris Ratcliffe/Bloomberg Global Must Reads Le Pen’s move from fringe to frontrunner in France’s parliamentary elections has been due in part to her [willingness to soften]( some of the more divisive rhetoric of her father Jean-Marie Le Pen and to reassure business over her economic policies. Her far-right National Rally party is on course for a historic victory on Sunday, though it looks set to fall short of an outright majority. - [Sign up for the Paris Edition newsletter]( for special coverage throughout the French election. Le Pen dances with her father at a political convention in Paris in May 1984. Photographer: Jacques Pavlovsky/Sygma/Corbis/Getty Images The chorus of voices that want Joe Biden to step aside following his disastrous debate performance is growing louder, and [not only at home](. From Brazilian President Luiz Inacio Lula da Silva to European officials, speaking privately, there is a desire for the US president to clear the way for someone with a better shot at beating Trump in November. Iran’s presidential runoff today is a straight fight between reformist Masoud Pezeshkian and anti-Western Islamist Saeed Jalili. They’ve [clashed in televised debates]( over the future of the now-defunct nuclear deal, internet censorship and how to revive the struggling economy to woo an electorate that mostly shunned the ballot box in last week’s first round. The vote comes during a crisis of legitimacy for the Islamic Republic and its ultimate ruler, Supreme Leader Ayatollah Ali Khamenei. Israel is considering a fresh proposal from Hamas [on a pause in fighting in Gaza]( and a release of hostages, raising the possibility of a breakthrough following months of deadlocked talks. A senior US official said the Palestinian militant group has broadly agreed to [the framework of a cease-fire]( proposal with Israel, though the deal’s mechanics aren’t resolved. The head of Mossad will travel to Qatar today, local media said. The wife of Spanish Prime Minister Pedro Sanchez is due to testify in court today as part of an investigation into her business dealings that’s rocked the nation’s politics for months. Begona Gomez is the target of a probe into [alleged influence peddling]( and private-sector corruption. No charges have been filed against her and the government has denied any wrongdoing. Hungarian Prime Minister Viktor Orban arrived in Moscow on a self-styled [“peace mission”]( just days after he visited Kyiv, triggering a rebuke from European Union leaders who said he had no mandate to represent the bloc. Mexican President-elect Claudia Sheinbaum named Rosa Icela Rodriguez as interior minister, [sounding a note of continuity]( as she navigates the transition period before Andres Manuel Lopez Obrador leaves office in about three months. Romania scheduled key elections for later this year after [weeks of bickering]( between the nation’s ruling parties over the timeline laid bare cracks in the two-year long power-sharing government. Washington Dispatch Biden today [will continue]( his campaign rescue mission with a trip to the battleground state of Wisconsin and an interview with ABC News. While both events will be crucial to whether he can convince top Democrats, donors as well as voters that he’s capable of defeating Trump and [serving four more years]( in the Oval Office, the ABC interview with George Stephanopoulos presents perhaps the greater challenge. He’s certain to face detailed questions about his mental fitness and why he came across as frail and confused in last week’s debate. Trump has a challenge of his own as the Republican National Convention in Milwaukee draws closer: The selection of a running mate. Putting Mike Pence on the ticket in 2016 endeared him to Christian conservatives. While many stayed with him even after he and Pence parted ways, Trump must appeal to independents who didn’t vote for him in 2020. A strong vice presidential candidate could help win them over. One thing to watch today: The Bureau of Labor Statistics’ jobs report for June will be closely watched for an indication of how much the economy has slowed. [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 The recession in German urban residential property is coming to an end, due in part to an intensifying housing shortage in key cities. [Prices have corrected]( much more strongly than in other European countries because the majority of people rent their homes, meaning consumers have the option to remain tenants rather than take out pricey mortgages. However, less sought-after locations — and developers who invested in them — are still struggling and that might create a two-track residential market. And Finally Trump is sincere when he says he has proposals to end the war in Ukraine quickly. That’s according to Russian President Vladimir Putin, who said that while he has no details on the plan, [he will support it](. Putin was speaking in Astana, Kazakhstan, at a summit of the Shanghai Cooperation Organization, a day after Ukrainian President Volodymyr Zelenskiy told Bloomberg TV that Trump “should tell us today” what his ideas for ending the war would be if he wins November’s election. Souvenir matryoshka dolls depicting Putin and Trump at a tourist stall ahead of the St. Petersburg International Economic Forum in 2017. Photographer: Andrey Rudakov/Bloomberg Pop quiz (no cheating!) Which Western leader said China could end the war in Ukraine with one phone call if it chose to? Send your answers to balancepower@bloomberg.net. 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