Labour’s
fiscal
agenda
is
modest,
with
a
focus
on
delivering
economic
stability,
there
should
also
be
limited
implications
for
the
economy.
We
expect
the
new
government
under
Keir
Starmer
to
maintain
tight
fiscal
policies.
This
should
facilitate
a
gradual
decline
in
inflation
and
enable
the
Bank
of
England
(BoE)
to
begin
cutting
interest
rates
soon
–
and
potentially
cut
more
than
markets
expect
next
year.
Therefore,
we
believe
UK
government
bonds
are
attractive
at
current
levels.
Quentin
Fitzsimmons,
senior
fixed
income
portfolio
manager
at
T.
Rowe
Price
The
new
government
is
expected
to
adhere
to
current
fiscal
rules,
which
stipulate
that
government
debt
should
fall
as
a
percentage
of
annual
GDP
in
five
years.
At
present,
UK
debt
to
GDP
is
just
under
100%
of
GDP.
Fiscal
headroom
is
limited,
so
it
is
unlikely
the
new
government
will
announce
major
spending
increases
or
tax
cuts.
Natalie
Bell,
fund
manager,
Liontrust
Economic
Advantage
team
After
the
election
a
number
of
stars
should
align
–
a
stable
government,
interest
rates
falling,
inflation
stabilising
and
growth
returning.
This,
coupled
with
likely
policy
intervention,
should
help
turn
the
tide
following
decades
of
outflows.
We
hope
the
next
government
recognises
the
opportunity
to
promote
economic
growth
and
domestic
prosperity
via
a
thriving
stock
market
sooner
rather
than
later.
James
Lynch,
fixed
income
manager
at
Aegon
Asset
Management
One
of
the
legacy’s
of
Liz
Truss
…
is
that
there
has
been
much
more
attention
on
the
relationship
between
politics,
economic
policy
and
the
bond
markets
not
just
in
the
UK
but
in
other
countries,
no
one
wants
a
repeat
of
that
period.
But
for
now,
the
gilt
market
will
no
doubt
go
back
to
looking
at
the
latest
inflation
figures,
BoE
speeches
and
following
US
Treasuries
for
guidance.
Neil
Mehta,
investment
grade
portfolio
manager
at
RBC
BlueBay
Asset
Management
Aware
of
not
upsetting
the
apple
cart,
Starmer
and
his
team
are
likely
to
look
for
quick
wins
before
the
Autumn
budget,
be
it
via
reducing
EU
red
tape
to
open
up
trade
and
investment,
to
re-configuring
the
BoE’s
remit
to
save
on
Quantitative
Tightening
indemnity
which
is
creating
a
fiscal
drag.
While
the
serious
structural
challenges
in
the
UK
will
be
very
difficult
to
fix,
the
new
government
may
find
itself
with
a
reasonable
honeymoon
period
and
some
favourable
short
term
tailwinds.
Investors
are
likely
to
give
them
the
benefit
of
the
doubt
for
now
Trevor
Greetham,
head
of
multi
asset
at
Royal
London
Asset
Management
The
battle
against
inflation
is
by
no
means
won
and
an
uncertain
geopolitical
backdrop,
populism
and
a
drop
in
fossil
fuel
capacity
as
we
transition
to
net
zero
all
point
to
further
cost
of
living
surges
in
coming
years.
If
these
are
seen
as
‘just’
spikes,
the
Bank
of
England
is
likely
to
accommodate
them,
and
unanticipated
inflation
could
help
Labour
with
their
fiscal
conundrum
by
pushing
incomes
above
tax
thresholds
and
debasing
the
real
value
of
government
debt.
Alex
Wright,
portfolio
manager
of
Fidelity
Special
Situations
and
Fidelity
Special
Values
While
there
continues
to
be
a
degree
of
uncertainty
both
in
the
UK
and
globally,
the
general
UK
economic
outlook
has
improved.
Companies
have
proved
surprisingly
resilient
and
we
are
encouraged
by
the
performance
of
our
holdings
in
the
recent
reporting
season.
UK
equities
continue
to
trade
at
a
wide
discount
compared
to
other
markets,
representing
an
attractive
opportunity.
Matt
Evans,
portfolio
manager,
UK
sustainable
equities
at
Ninety
One
The
election
result
could
be
taken
as
a
positive
for
UK
capital
markets.
Stability
and
confidence
are
key.
The
challenge
will
be
to
demonstrate
Labour
can
boost
growth
while
managing
a
tight
fiscal
position.
If
it
shows
progress
on
these
fronts,
then
confidence
from
business
and
overseas
investors
will
build,
leading
to
a
positive
outlook
for
the
UK
economy
and
market.
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