Right-Wing Reform UK Hits New Polling High w/PM Sunak Under Pressure

The right-wing anti-immigration Reform UK has recorded its highest-ever level of public support in a YouGov opinion poll published today. The strength of Reform UK, which emerged from the remnants of the eurosceptic Brexit Party after the UK left the EU, is likely to put additional pressure on PM Rishi Sunak. With some MPs from his centre-right Conservative Party calling for his ouster ahead of the general election expected at the end of this year, being outflanked on the right could see the gov't pursue a more populist agenda - both socially and fiscally - in order to try to boost support.

• YouGov polling: Labour: 47% (=), Conservatives 20% (=), Reform UK 13% (+1), Liberal Democrats 8% (=), Greens 6% (-1), SNP 4% (+1) Fieldwork 23-24 Jan, 2,008 respondents.
• The main implication for the UK's fiscal outlook and markets from this political trend could come in the form of the gov'ts plans for the upcoming budget on 6 March. The gov't could embark on sizeable tax cuts or public spending increases as a result of greater fiscal headroom than initially expected.
• Many gov't ministers have spoken up their desire to implement tax cuts, but only when it is fiscally responsible to do so. The Institute for Fiscal Studies think tank today warned of the prospect that any tax cuts coming in March or during the election campaign could have to be rolled back after the vote if the fiscal picture deteriorates.