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What are business prospects like if/when Labour win?

The latest poll results out yesterday have labour at 44% and the conservatives at 22%. If we switch to a labour government how will it impact on businesses?

The strategists at J P Morgan are forecasting a “net positive” for the financial markets with a cautious fiscal approach most likely. A labour majority was thought positive for banks, builders and supermarkets.

MUFG, a Japanese investment bank thought a majority win for Labour would be “positive for the pound”, ending a period of political instability.  MUFG indicated an expectation that there would be higher government spending and the potential for an improvement in the relationship between the UK and the EU.

Bloomberg News had a poll and the 268 respondents said a labour win would be the best result for the pound.

Financial Services firm Ebury have reported that the mere prospect of Labours victory is already strengthening the pound in comparison with the euro which is struggling following the uncertainty of how strong the far-right parties are becoming.

J P Morgan are suggesting that the FTSE200 will fair better than the FTSE100 – the implication is that medium sized companies will initially outperform the larger blue chip organisations.

Not everyone is happy though, discussions about nationalisation of the train network, increased taxes on energy companies and increased regulation of water companies cause disturbances in those sectors.

The majority of media conversation relates to the markets, energy and of course taxation. Of interest to smaller local businesses is the prospect of an increase in home building and benefits that would bring.

Planning has evolved over recent years making it harder for developments to get the green light for works and there is a paralysis in the system. Labour have said they will reform the system to get things rolling again.

Paul Cheshire, Emeritus Professor of economic geography at the London School of Economics things that freeing up development will boost productivity and generate a “positive hit from actually building things” new housing is certainly required and if the system is eased “There definitely would be a growth pay-off”

A change in government is very likely, changes for our local councils are possible too. The predictions for business growth from this Labour government are actually better than previous elections.  


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