British Prime Minister Gordon Brown averted the immediate danger of government collapse today with a cabinet reshuffle that secured the loyalty of key ministers, but the political uncertainty weighed on sterling, Reuters reported. By backing down from replacing finance minister Alistair Darling, Brown appeared to have headed off an open revolt by his Labour party for now. But his authority has been wounded at a time when Britain is in its deepest recession in 60 years and markets and the country are looking for strong government. The pound hit a two-week low against the euro before recovering most of its ground. "The market is waking up to what a mess politics are in the UK," RBC currency strategist Adam Cole said. Three more senior ministers quit the government on Friday, bringing to total to six in the past four days. However, alongside Darling, Foreign Secretary David Miliband and heavyweight Business Secretary Peter Mandelson stayed in their posts, shoring up the prime minister's position. "I will not waver, I will not walk away, I will get on with the job and I will finish the work," Brown told a news conference after details of the reshuffle were announced. There was some relief for investors from news that Darling was to remain in his job, offering continuity in the most important portfolio for markets. Bond prices were unaffected and the main stock index was up 1.2 percent. Brown appeared to give up on a plan to replace Darling with his close ally Ed Balls. Darling has won praise for his efforts to pull Britain out of recession. Alan Johnson, who Brown moved from the health ministry to the more powerful interior ministry, has been seen as the front-runner to replace Brown. His appointment appeared to ensure the loyalty of the man most likely to challenge him. However, Brown still faces a nascent revolt among Labour members of parliament (MPs), some of whom have been gathering signatures to unseat him. A change of leader would raise the prospect of a snap election in the autumn rather than the widely expected date of May 2010. The limited personnel moves mean few abrupt changes in policy are likely, while the fact key ministries remained unchanged appeared to show Brown had given up ground and reappointed some ministers in order to secure their loyalty.
