UK Economy Roundtable – Political risk and the UK economic and market outlook

Questions about the future of the Keir Starmer government are swirling and, with key local elections looming, they are unlikely to fade anytime soon. But how is political dysfunction influencing the UK macro outlook and financial markets? If the Starmer government were to fall, how disruptive would its replacement be for gilts and sterling? And how will fiscal and monetary policies be affected amid uncertainty over the government’s future?

Our economists explored these questions in a special in-person roundtable at our London office on Tuesday 24th February. In this informal discussion, the team addressed a wide range of key issues surrounding the UK macro and market outlook, including:

• Regime change: What would happen to the economy and financial markets if Starmer and Reeves were replaced
• The Chancellor’s headroom: Whether the fiscal tide is turning in time for the March statement
• An AI productivity boom?: Whether AI is already influencing the labour market and growth