FTSE 100 and Sterling rise after Conservative election defeat, with Labour securing majority.

From Morningstar: 2024-07-05 05:39:00

The FTSE 100 opened slightly higher as Rishi Sunak returned to Downing Street after a tough election defeat. With just 5 seats left to declare, London’s index was up 0.19%, signaling a positive end to the week. Sterling also rose against the dollar and Euro. Labour secured 411 seats, Conservatives 119, Lib Dems 63, SNP 38, and Reform Party 4.

Labour’s focus post-election is on fiscal policy, pledging no major tax hikes. Reforms are expected, but revenues from proposed measures are deemed minor by the Institute for Fiscal Studies. The party must now decide how to finance increased public spending without excessive borrowing or tax hikes.

Major upsets included the defeat of Liz Truss in Norfolk South West and other Conservatives like Bim Afolami, Grant Schapps, Jacob Rees-Mogg, Penny Mordaunt, and Gillian Keegan. Jeremy Hunt retained his seat with a decreased majority. Rishi Sunak, Iain Duncan Smith, Esther McVey, and James Cleverly also kept their seats.

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