UK election: Winds of change after the landslide Labour victor

In Short

Landslide Labour victory and historical defeat for Conservatives. In yesterday’s parliamentary election, the governing Conservatives suffered a historical defeat by losing almost two-thirds of the seats they got in the 2019 election (119 from 368 at the time of writing) whereas the Labour Party broadly doubled the number of its seats (to 411 from 201).

Highlights:

  • Yesterday’s parliamentary election resulted in a landslide Labour victory giving it a comfortable absolute majority of 411 (+210 seats) out of 650 seats while the faction of the governing Conservatives was cut to just 119 (-249 seats), the worst in its history.
  • Amid a participation of only around 60%, close to a record low, the rise of the right-wing populist Reform UK party that got 14% of the votes and 4 seats in parliament contributed to the weak Tories result. 
  • The new government traditionally becomes operative quickly after the election. Following Mr Sunak’s resignation, the new Prime Minister, Keir Starmer, will immediately be appointed by the King and is expected to lay out his government’s program on July 17. 
  • While the Labour Party manifesto suggests an overall unchanged fiscal outlook, the comfortable majority might be tempted to embark on a loser fiscal path. Testing times will be the 2025 budget, presented in late September or early October. 
  • As the UK government change had already been anticipated, the financial market’s reaction has been limited.  

Download the full publication below

UK election outcome final
Picture

© Generali Investments, all rights reserved. This website is provided by Generali Investments Holding S.p.A. as the holding company of the main asset management companies of the Generali Group having, directly or indirectly, the majority shareholding in the companies listed below (hereinafter jointly, “Generali Investments”). This website may contain information related to the activity of the following companies: Generali Asset Management S.p.A. Società di gestione del risparmio, Infranity, Sycomore Asset Management, Aperture Investors LLC (including Aperture Investors UK Ltd), Plenisfer Investments S.p.A. Società di gestione del risparmio, Lumyna Investments Limited, Sosteneo S.p.A. Società di gestione del risparmio, Generali Real Estate S.p.A. Società di gestione del risparmio, Conning* and among its subsidiaries Global Evolution Asset Management A/S - including Global Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd - Octagon Credit Investors, LLC, Pearlmark Real Estate, LLC as well as Generali Investments CEE. *Includes Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”).