First the UK had the finances of an emerging market. Then it seemed to have the politics too. For a brief moment on Thursday, rumours swirled through currency markets that Gordon Brown, the prime minister, had resigned or been ousted in a cabinet rebellion. Sterling swooned 1.3 per cent. Then Downing Street said talk of Mr Brown resigning was “absolute rubbish”. That didn't help the pound much. By the end of the day, sterling had gone, possibly assisted by a large piece of mergers and acquisitions finance, but Mr Brown hadn't.

Other markets were less fussed. The FTSE slipped while European equities edged ahead. But London's drop, such as it was, was largely a result of falling mining stocks, particularly Rio's and BHP's, rather than heightened political risk. Bond markets even rose, while credit default swaps on UK sovereign debt tightened 7 basis points. If this was a classic emerging market crisis, bonds would have dived, credit default swap spreads exploded, and the currency collapsed. News cameras would then have captured a bowed prime minister as he headed out the door.

In fact, the opposite has happened through much of this crisis. Last year, the government's popularity rose while sterling fell through the floor. Then, in December, voters caught up with investor concerns about the steep rise in public spending and the possibility of a sterling crisis that this entailed. Since then, Mr Brown's popularity has sunk. Yet, oddly, sterling has gained. Since the expenses scandal broke in early May, the trade-weighted pound has even strengthened 6 per cent. There are many possible reasons. But a growing belief that Mr Brown's increasingly unpopularity will force an early election and that the opposition, which has talked tough about cutting spending, will win, cannot have hurt.