Keir Starmer’s Labour Party has vaulted back to power in the U.K. for the first time in 14 years, according to exit poll data released Thursday.
The victory, which was anticipated in polling, means the center-of-left party will take the helms of the country from Rishi Sunak’s Conservative Party.
In a landslide, an exit poll released by the BBC and other news stations showed Labour with 410 seats, compared to the Conservatives on just 131 seats.
Financial markets yawned in response — the pound was virtually unchanged vs. the dollar
GBPUSD,
+0.05%
and the euro
GBPEUR,
-0.01%.
Sunak was unable to make inroads in polls after calling for a surprise election six months before absolutely necessary, after running a campaign that began in the rain and included leaving a D-Day celebration early.
Rachel Reeves, who previously was a Bank of England economist, will become chancellor of the exchequer, the equivalent of finance minister.
She has pledged not to increase income or value-added taxes, though analysts say the new government may increase inheritance or capital-gains taxes. She’s pledged to limit spending by moving the current budget into balance.
A voter enters a polling station at The Old Fire Station in Hackney, east London, on July 4, 2024 as Britain holds a general election.
paul ellis/Agence France-Presse/Getty Images
Economists aren’t expecting much from the new government. Goldman Sachs economists see a growth upside of one-tenth of a percentage point in 2025 and 2026.
Starmer has said he won’t try to undo Brexit, the U.K.’s departure of the European Union, that was ushered in by the Conservatives. In fact he said on Wednesday the U.K. would not rejoin the E.U., or even the single market or customs union, in his lifetime.
Sunak’s message late in the campaign was a call to limit Labour’s “supermajority,” implicitly conceding defeat. Unlike the U.S., the U.K. parliament’s ruling party does not have extra powers with a higher margin-of-victory.
Sunak was the third Conservative prime minister this term, replacing scandal-ridden Boris Johnson and Liz Truss, who resigned after financial markets gyrated in response to her budget plans.
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