Commenting, Charlotte Kennedy, Chartered Financial Planner at Rathbones, says: “The Chancellor’s Mansion House speech had all the hallmarks of a swan song, serving as both a defence of the government’s economic record and a statement of intent that may ultimately be carried forward by a different administration. With Andy Burnham all but set to be handed the keys to No.10, the speech was as much about cementing a legacy as setting the direction of travel.
“That comes at a time when investors are already feeling uneasy about the UK’s outlook. Our latest polling found that economic growth (42%) and political uncertainty (41%) are now the biggest concerns for UK investors, comfortably ahead of interest rates and inflation. Against that backdrop, the Chancellor’s repeated emphasis on stability, investment and long-term growth was clearly intended to reassure markets that the UK’s economic framework remains robust despite the prospect of political change.
“For investors, the more important question isn’t who forms the next government, but which policies survive the transition. Many of the financial reforms introduced over the past two years now appear firmly embedded. Measures to encourage greater participation in investing through ISA and unlocking pension capital for productive investment, modernise financial markets through digital innovation, and increase lending to households and businesses are structural changes designed to strengthen the UK’s investment landscape over the long term. They are unlikely to be dismantled simply because there is a change of government.
“A Burnham administration will, of course, seek to put its own stamp on the economy, with its own priorities for growth, regional investment and public spending. But unpicking reforms that deepen capital markets, improve access to finance and encourage long-term investment would create uncertainty at precisely the time investors are looking for greater confidence and policy consistency.
“Our polling also highlights that investors’ concerns extend well beyond domestic politics. Nearly half (46%) cite geopolitical developments as the biggest risk facing global markets over the next 12 months, ahead of concerns about recession or market valuations. While Westminster is entering a period of political transition, investors ultimately care more about policy certainty than political personalities.
"Whether it’s the outgoing Chancellor or a Prime Minister-in-waiting setting the agenda, governments come and go, but successful investing depends on looking beyond the electoral cycle. Maintaining a diversified portfolio, staying invested and focusing on long-term financial goals remains the most effective way to navigate periods of political and market uncertainty.”
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