UK100 Slips Post-Election but the Change a Likely Headwind
UK100 Analysis
After May's record peak, UK100 pulled back as inflation eased but not as much as anticipated, which along with the general elections announcement, pushed back market expectations for a pivot by the Bank of England. The current quarter has started mixed and UK100 slips follow the landslide Labour victory in Thursday's elections, which returned to power after fourteen years. This creates scope for a test of the 38.2% Fibonacci of the 2024 low/high advance, although deeper correction that would breach the 200Days EMA (blue line) has a higher degree of difficulty.
However, UK has already defended this level and above it, bulls are in their driver' seat with the ability to push for new all-time highs (8,488). The UK economy exited its brief recession, inflation has decelerated substantially and the central bank has pointed to a less restrictive stance ahead, despite uncertainty around the timing of the first rate cut.
Furthermore, the political change is likely to be a tailwind, since the UK has its best opportunity for stability - which investors seek - just as political uncertainty rises in France, US and elsewhere. The UK could now enjoy a no-drama government for the first time in ten years, after Brexit, Covid, erratic Johnson tenure and messy Truss brief stint. Assuaging concerns of a potentially unfriendly stance towards markets by the pro-worker party, the Labour manifesto emphasized on "wealth creation" [1] and new PM Starmer made economic growth "the number one mission" of his government. [2]
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 08 Jul 2024 https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf | |
| Retrieved 17 Apr 2026 https://www.gov.uk/government/speeches/prime-ministers-remarks-at-downing-street-6-july-2024 |
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