Markets have shown little reaction to the news that Britain will be going to the polls on July 4, with the future path of interest rates still front and centre for investors.
Both the FTSE 100 and the FTSE 250 have both shrugged at the news.
It’s possible that there will be larger market movements as polling day draws near, particularly once the manifestos are published, but the prospect of a Labour government does not look like it will spook markets.
“The prospect of a government spearheaded by Sir Keir and Rachel Reeves is unlikely to spark the sort of fear that would have been inspired by an administration whose driving forces were Jeremy Corbyn and John McDonnell,” Russ Mould, AJ Bell’s investment director, said.
But can we read anything from blue or red? Well, markets do tend to perform better when the Conservatives are in government, with Margaret Thatcher’s second term proving to be the most value-accretive.
However, it is predictably not quite that cut and dry.
Simon French at Panmure Gordon notes that equity indices globally performed better during periods of Tory rule, something for which the Conservatives can hardly claim credit for.
“Looking at relative performance we note that under Labour governments, UK equities have performed in the middle of the international distribution, whilst under Conservative governments they have lagged,” French said.
Will it make much of a difference this week? Probably not, no.