For Labour Now, It’s the Gilts Market, Stupid
Like Thatcher and Blair before him, Keir Starmer surges to power in a mandate dictated more by brutal finances than voters.
Markets will manage Keir Starmer’s expectations.
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“I wouldn’t vote for Labour,” one of my favorite long-standing (and staunchly Conservative) contacts in the City told me this week, “but they aren’t going to mess things up.” That attitude permeates the UK’s financial community, where the mood for months has been that the Conservatives deserve to lose power, and that it doesn’t matter much. Now the voters have spoken and taken exactly the same attitude as the City by casting ballots tactically against the Tories even as Labour’s share of the vote didn’t rise much. We’re about to find out whether the air of calm is justified.
At the time of writing, Labour is on course for the biggest landslide since 1906 with a gain of more than 200 seats in the 650-seat House of Commons. But it’s oddly underwhelming. Turnout was very low. Nigel Farage’s Reform UK party looks to have gained a significant bridgehead with maybe a dozen seats, suggesting Britain is partial to the populism that’s on the march on the Continent. It was a massive rebuke for the Conservatives. Even Jeremy Hunt, the chancellor of the Exchequer, appears to have lost his seat. But it generated little excitement in the populace, or initially in the currency markets, where the pound barely budged.