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.  

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