It is often said that a week is a long time in politics, and this week has proven that statement truer than ever. Last Friday, we welcomed a new prime minister as King Charles formally appointed Sir Keir Starmer as Britain’s 57th Prime Minister. Shortly after, Starmer got to work delivering his inaugural speech in front of his new residence, at No. 10, and formally naming his Cabinet. The team met for the first time in Downing Street, with history being made as Rachel Reeves was appointed as Britain’s first female Chancellor.
The Prime Minister barely had time to settle into his new home. Less than a week into his premiership, Starmer boarded the red, white, and blue prime ministerial jet for the first time, heading to Washington for this year's NATO summit on Tuesday. There, he met with numerous global leaders as the new leader of the UK. This three-day gathering, marking NATO's 75th anniversary, comes at a pivotal moment for the security alliance. For Starmer, the summit represents a critical opportunity to reset the U.K.’s relationship with Europe and despite his campaign slogan of "CHANGE," he will undoubtedly reassure allies that the UK’s ongoing support for Ukraine is one area that will remain unchanged under his leadership.
While the event marks 75 years of the military alliance, the topic of aging has been sensitive for its host, Joe Biden. This week, the 81-year-old U.S. president has faced further calls to withdraw as the Democratic nominee this week following his performance in an election debate with Donald Trump and growing rumours about his health. This must have made Starmer and Biden’s first meeting particularly interesting, as the new PM has already had to defend his stance to the media ahead of their encounter, having recently promised to enforce retirement at age 80 for members of the Lords. However, when asked if this age limit should apply universally, the Prime Minister clarified that his plans “did not reflect on how other elected representatives are chosen in other countries.”
While the transition from Conservatives to Labour has proven relatively smooth in the UK, the same cannot be said for France. Despite initial successes for Marine Le Pen’s hard-right Rassemblement National Party in the first round of elections, the party fell to third place over the weekend, with the French Leftist party emerging as the unexpected victors. This surprising outcome has left the French political scene more unclear than ever, with no party winning an outright majority. President Macron now faces a challenging path as he navigates coalition negotiations, signalling a potentially rocky road ahead for his administration.
Here in the UK, while details on how our new government plans to fund their ambitious changes remain largely unclear, we are in a stronger position than some of our fellow NATO members this week. Markets remain relatively optimistic, and we even experienced a rally in the FTSE 250 index which includes more domestically oriented stocks that are positively correlated to the UK economy. As investors anxiously hold their breath to see how the new government's policies will impact their wallets and portfolios, rest assured that we are closely monitoring all developments to ensure your financial advice remains up to date as the changes unfold. What we do know is that the party has ruled out an ‘emergency budget’, promising to give the Office for Budget Responsibility (OBR) 10 weeks’ notice of a fiscal event, so it can prepare a forecast. This means we are unlikely to know more about tax changes until September at the earliest.
Away from politics I am sure you will join me in a rousing chant of ‘Come on England’ ahead of the Euro 2024 final on Sunday. Is football finally coming home?
Do have a good weekend.
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