What might be the impact of UK election on your investments?

So, Labour have returned to power in the July 2024 UK election with a huge majority, if not a corresponding share of the popular vote thanks to the quirks of the first past the post system in the UK.

Naturally this change in government leads to concerns among investors as to how their investments will fare within the UK, notwithstanding the wider global context of instability with the US election later in the year and ongoing troubles in Ukraine and the Middle East. 

Throughout the campaign Kier Starmer has stressed his desire for growth and to try to reassure voters that the economy is in safe hands with Labour. Encouraging sounds in principle.

So, how should you react?

Despite Brexit the UK economy is still very much subject to the wider changes in the world and the markets have known for a long time that a Labour majority was highly likely so will have factored that change in already.

Also on the cards are signs of a closer approach to the EU, albeit one short of rejoining the Common Market as the Liberal Democrats proposed in their manifesto.

These signs point towards taking a steady and cautious approach to your investments with no dramatic changes in policy as yet and a long way from the 90% top rate of tax proposed by the leftist alliance in France's recent election. It may well be the time to sit tight and watch for further policy announcements with changes likely in the utilities, energy sectors both in terms of regulations and a potential windfall profits tax.


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