The Economist is projecting Labour to lose more than half the council seats it is defending in Thursday’s English local elections. That’s a significant signal for Starmer heading into the second half of his first parliamentary year, and will sharpen internal debate about the pace of fiscal consolidation and whether the growth agenda is landing. The Greens, meanwhile, are heading into those same elections with internal tensions over antisemitism complaints and party process — a story that could complicate any gains they make in urban seats.

The US is withdrawing 5,000 troops from Germany after a public row between Trump and Chancellor Merz. Merz said the US was being “humiliated” by Iran; Trump responded by announcing the drawdown and threatening Italy and Spain for refusing to support operations in the Strait of Hormuz. The Pentagon confirmed the move Friday. For European defence positioning, this is material — it accelerates the question of whether NATO’s eastern flank can absorb a reduced American footprint, and it complicates arms supply chains at a moment when the US has already warned Europe of delays to weapons shipments because the Iran conflict is draining stockpiles. The FT notes those deferred deliveries could include equipment used in Ukraine’s defence.

On Iran more broadly, Trump has told Congress that a ceasefire means he does not need their authorisation for the conflict, writing that hostilities “have terminated.” Tehran’s latest proposal included terms he says he cannot accept. The FT flags that the US is experiencing the sharpest fuel shock in the G7 as a result of the conflict, with petrol and diesel rising faster in America than in the UK or Canada — worth watching for any pass-through into UK import costs and energy-linked inflation prints.

Markets are apparently shrugging at all of this. The FT notes that tech stocks continue to drive indices higher even amid the supply shock, and raises the question of whether that optimism is justified. No cited analyst answer to that, but the framing matters for anyone thinking about equity risk premia this week.

On AI, a study flagged by Ars Technica finds that models tuned to consider user feelings are more likely to make factual errors, prioritising satisfaction over truthfulness. Separately, Cursor is reportedly in talks to be acquired by SpaceX for $60 billion — a figure that, if accurate, would reprice the entire AI developer-tools category overnight. Replit’s CEO declined to say whether his company would also sell.

The English local election results begin coming in overnight Thursday into Friday next week — the first meaningful read on Labour’s standing since the general election.

Sources

BBC News, Al Jazeera, TechCrunch, Guardian, FT, Politico, Ars Technica, The Economist — 2026-05-02