UK
The main opposition centre-left Labour party is set to launch its election manifesto at the top of the hour. A livestream of the event can be found here. The strong position of Sir Keir Starmer's party in opinion polling means that there will be significant market focus on the content of the manifesto and Labour's costing of its policy promises, as the party is viewed as the overwheming favourite to form the next gov't.
- In line with the party's low-risk campaign, there are not expected to be any unexpected announcements made in the manifesto launch. Labour have essentially ruled out any tax cuts, although have committed to not increasing income tax rates, national insurance, VAT and corporation tax. This has resulted in speculation of hikes post-election in capital gains tax, council tax, and fuel duty (the former seen as the most likely).
- Spending priorities will also be closely monitored. Starmer has sought to position Labour in the political centre ground in recent years, but there still could be some market jitters if substantial spending increases are pledged without requisite tax hikes or expenditure cuts elsewhere.
- Betting markets put the chances of a Labour majority at 94.3%, compared to 5% for a hung parliament and 1% for a Conservative majority.
Chart 1. Betting Market Implied Probability of Election Outcome, %
Source: Smarkets
234 words