Investment firm urges Labour to ‘revitalise’ UK stock market

James Igoe, head of the Manchester office at Redmayne Bentley, one of the UK’s largest independent investment management firms, said: “While a Labour victory was expected, it is hoped the result could inspire a UK stock market revival. It is crucial the party makes the UK economy more attractive and enhances liquidity in the market, especially from overseas investors.

“Foreign investors have, for some time, considered the stock market to be a function of the UK’s leadership. As such, it has significantly suffered during times of stress, reducing allocations to UK equities and pension funds. Firms such as ARM listing abroad are a reflection of this in recent times.

“This has not been helped by the volatility in sterling and gilts. After Liz Truss’s mini-budget in 2022, volatility in UK gilts was extremely distressing for many and some of the highest in recorded history.

“Arguably, a Labour government reduces the risk premium on UK stocks if it can deliver greater stability over its term in office.

“We expect to see an increased focus on cleaner energy with the creation of the £8.3bn Great British Energy fund and co-investing in technologies to boost the production of eco-friendly alternatives. This will likely mean the demand for nuclear power will surge. However, these environmentally-friendly approaches are a potentially positive step for UK commerce.

“Given the party’s pledge to build 1.5m new homes, this will present a huge number of opportunities in the housing sector. We expect this will take time to deliver, given the constraints around planning and the pricing dynamics of land and materials. This may continue to impact on the ability of housebuilders to deliver new housing targets.

“Ultimately, it is vital the new government rapidly revitalises the stock market, attracts companies to list in the UK, and delivers true economic growth to underpin domestically-represented businesses.”