April 28 (Reuters) - Sterling traders are alert to British political risks as a Tuesday vote nears on whether Prime Minister Keir Starmer should face a Parliamentary probe over the appointment of Peter Mandelson as Britain's ambassador to the U.S. - as well as next week's local elections. Labour's large majority in Parliament means it would be a huge GBP-negative surprise if more lawmakers voted in favour of an inquiry into Starmer. The vote is expected this afternoon, hours after Starmer's former aide Morgan McSweeney answers questions from Parliament's foreign affairs committee about Mandelson's appointment.

If Starmer avoids the frying pan, he then faces a potential fire from Welsh parliament, Scottish Parliament and English local elections on May 7. If Labour performs abysmally in those elections, Starmer will be blamed - and the risk of a GBP-negative Labour leadership challenge will rise. Should a leadership challenge come to pass and Starmer exits Downing Street, the pound could weaken on fears that Labour could choose a successor from the soft left of the party who might pursue a looser fiscal policy.

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(Robert Howard is a Reuters market analyst. The views expressed are his own)