The UK’s long-awaited general election for 2024 is finally underway – and there’s now less than a month to go until voters go to the polls to shape the country’s direction of travel for the next five years.
And beyond simply deciding whether the Red Team or Blue Team – or perhaps even an elusive third option – will be taking the reins for the foreseeable future, the outcome has obvious (and potentially significant) implications for the economy, including our hard-earned investments.
That’s why we’ll be taking a deep dive into all things election over the coming weeks, answering your most pressing financial questions – with the help of those in the know.
If you have your own query about how the election results could impact your savings or pension plan, get in touch at enquiries@eadonco.com and we’ll put it to our trusted financial experts for a future instalment.
So, let’s dig in… first and foremost, who do the polls say will be the big winners and losers this time around? And how can we expect the economy to respond?
It goes without saying we’re impartial, so keeping strictly to the data:
According to national pollsters YouGov, Labour have a commanding lead on 40%, a leisurely 21 percentage points ahead of Rishi Sunak’s Conservative Party, who are currently on 19%.
Away from the two main parties, the newly re-Nigeled Reform UK are sitting at 17%, while the Liberal Democrats have just broken into double figures territory at 10%. And rounding out the league table, we have the Greens on 7% and Scottish National Party (SNP) on 3%.
So, those are the scores on the doors; draw your own conclusions – as we said, we’re impartial.
But it bears repeating that there’s still several weeks to go and, if the last few years have shown us anything, it’s that nothing’s off the table.
Ok, noted – but what do the markets make of all this?
Well, as a general rule, financial markets are risk averse animals.
Changes to the status quo can, and do, impact markets – and this can cause investors to take less risk if any changes lead to instability.
During times of uncertainty, investors are less able to make informed decisions about how to make their money work for them when the economy is heading for a crossroads.
All of the above makes election season a typically uneasy time for the financial sphere.
However, this time around, the markets seem to have taken the news – even allowing for the shock timing and relatively short run-up until game day – in their stride. In fact, the FTSE 100 was trading marginally higher in the immediate aftermath of the announcement and has moved broadly sideways ever since.
Why’s that?
Analysts have noted two main reasons as to why 2024’s election drama has bucked the normal trend. The first one is that Labour has maintained a substantial lead over the Conservatives in the polls since late 2022 – meaning it’s likely most investors will have already factored in the strong possibility of waking up to a new government in a month or so’s time.
As Edward Stanford, Head of European Equity Strategy at HSBC, noted, “markets do not like surprises and this would not be a surprise.”
The second point is that there’s simply not that much difference between the two main parties’ fiscal policies heading into polling day – with both largely competing for the centre ground.
For her part, Shadow Chancellor Rachel Reeves has promised broad continuity with the Conservatives should she take over the country’s coffers in July, retaining such established policies as the pensions triple lock and adhering to current debt-to-GDP rules on government borrowing to help reduce the national debt over the course of the next parliament.
As we hear from the leading parties in the days ahead, we’ll keep you updated of changes to their policies and what this might mean for investors in the future.
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