The UK local elections have delivered a serious blow to Labour. The party has lost around 200 council seats and control of at least eight councils, with Reform UK making substantial gains across the north-east and the Midlands. Seats in Hartlepool, Chorley, Wigan, Redditch and Tamworth have all moved against Starmer. Scottish and Welsh parliamentary results are still coming in. The scale of the losses is worse than some internal projections, and the pressure on Starmer’s leadership will intensify over the weekend. For anyone watching UK political risk, this matters: a weakened prime minister heading into a difficult spending review period is a different macro backdrop than one with a stable mandate.

Reform’s surge is the other side of that story. Farage’s party is now a genuine force in local government, not just a polling phenomenon. How that translates into Westminster arithmetic over the next two years is the question, but the direction of travel is clear.

The US-Iran ceasefire is wobbling. Trump said overnight that the truce remains in place, but Iran is accusing the US of targeting an oil tanker and striking coastal areas. ASEAN leaders meeting in Southeast Asia are already calling for deeper energy cooperation and the reopening of the Strait of Hormuz, which tells you how seriously the region is treating the risk of a sustained disruption. Worth watching oil prices into the weekend.

The Economist is reporting that Russia proposed supplying Iran with fibre-optic guided drones — unjammable by conventional electronic warfare — to use against American forces. If accurate, that is a significant escalation in the Russia-Iran-US triangle and has implications for how the ceasefire holds.

On tech, Anthropic is fielding inbound investment offers that could push its valuation close to $1 trillion, which would put it ahead of OpenAI. Revenue is reportedly surging. Separately, Big Tech’s AI infrastructure spending has sent free cash flow across the sector to a decade low — the FT’s framing is that Silicon Valley has shifted from asset-light cash machines to capital-intensive infrastructure investors. That is a meaningful shift for anyone holding the mega-cap names.

Scottish Parliament results are due from midday today.


Sources

Al Jazeera, Guardian, BBC News, FT, TechCrunch, Politico, Ars Technica, The Economist — 2026-05-08