Economic Outlook and Market Commentary
As we reach the halfway point of 2026, the first half of the year has continued to surprise investors. Geopolitical tensions persist, with limited resolution surrounding Iran, Israel and the US, and restricted shipping through the Strait of Hormuz continuing to weigh on oil and export flows.
A wave of mega-IPOs, led by SpaceX on 8th June, has dominated financial headlines, whilst Keir Starmer’s resignation has triggered yet another UK leadership contest. Despite these headwinds, equity markets have continued to generate double-digit returns, with emerging markets, particularly South Korea, recording notable growth opportunities, whilst bond markets have delivered steadier but more muted performance.
Revolving doors: What does another UK leadership contest mean for investors?
On the 22nd of June, Keir Starmer announced his resignation from 10 Downing Street, leaving investors with a new set of questions to consider in the coming months. At the time of writing, Andy Burnham, fresh off his recent landslide victory in the Makerfield by-election, is the only person to announce their candidacy for Prime Minister, meaning he is currently expected to be sworn in 17th of July.
This resignation continues a period of high political instability, and when Labour elects its next leader, the UK will have officially had its 7th Prime Minister in just 10 years. Whilst markets tend to react poorly to uncertainty, they appear at present to be pricing in the likelihood of a Burnham government, and there are some key considerations for investors to weigh.
