Overnight the pound hit its lowest against the euro for two months, and although it has perked up a little in Asian trading this morning the pound is still looking a little sick, as politics gets into the box seat.

The Labour Party meets in Liverpool this week, barely two months after kicking out Sir Keir Starmer, and the markets will be asking, to quote former Bank of England chief economist Andy Haldane, whether Andy Burnham’s administration will take tough decisions or is a “traditional tax-and-spend socialist government with better TikTok videos.”

Haldane’s former boss at the BoE Andrew Bailey said on Friday that with diesel prices on the brink of an all-time high it will be hard to avoid interest rate rises. But even that – higher interest rates, or even the promise of them, may be bad for an economy but they tend to help a currency – hasn’t helped sterling. GBP/USD also fell to a two-month low, although it has also enjoyed a small bounce over the weekend.

Andy Burnham is said to be working hard on his own speech, due tomorrow at 2pm, and the markets will be looking for any comments that suggest a direction on the big economic questions facing the country, including high spending and low growth. He has already signposted that he wants to help ease cost of living problems.

However, these are largely being caused in the Middle East and there has been no let up. President Trump rejected Iran’s proposal to end the fighting and reopen the Strait of Hormuz, and oil climbed by more than 1% this morning, reversing part of Friday’s decline and taking it to 40% more than this time last year.

We will get inflation readings in one form or another from across the world this week, with shop price inflation from the UK tonight, flash inflation readings across the eurozone midweek and the key, core PCE price index in the USA on Wednesday afternoon.

Overall, a busy week with plenty to keep the markets moving.