Snapshot: There has been very little impact or volatility generated off the back of Labour’s recent election win. Always remember, the current price of stock markets account for about the next five years of expected events, and Labour’s election was expected.
Top stock market tip: No surprises are a good thing for investment markets! When big news is expected, markets don’t move much. But when something comes out of the blue, markets really move because it was unexpected.
Key takeaways
- The UK election has played out as expected – no shock to markets is good for everyone!
- With a strong majority, and a clear desire for stability in the UK, the election should lead to confidence in the growth outlook for the UK economy.
- Any drastic changes to policy or direction are unlikely in the near term. Any broader changes are likely to be forecast, accounted for and implemented in the years to come, if at all.
- The UK continues to be a fairly overlooked geography for international investors, and has appeared relatively “cheap” compared to other nations like the US. This should make it an appealing area for investors with a long-term view and the election result doesn’t change this.
Which part of the market might benefit?
Everywhere due to some much needed stability – but particularly:
- Infrastructure
- Defence
- Green Energy
How might a Labour government impact your wallet?
All eyes should be on the Autumn Budget later this year, as this will be the first really clear point in which we will start to learn what Labour’s stance is on key areas like tax, spending and pensions.
We believe that any drastic changes are unlikely in the short term (this year). Stability is going to be one of Labour’s primary aims as they lay out plans for the next four years. However, as always, there have been the swirling rumours of some changes coming to pensions, potentially including impacts on tax-free cash and rate of tax relief.
