UK Politics and Market Implications Following Prime Minister, Keir Starmer's planned departure and Andy Burnham's anticipated arrival as Prime Minister, the initial view is that the impact on UK markets will be limited. Although Burnham is seen as slightly to the left of Starmer, bond markets care more about fiscal discipline than political labels. The UK's constrained fiscal position leaves little room for any government to pursue expansionary policy without unsettling gilts. Some...

I arrived in the City in 2002, in the wreckage of the dot-com bust. It was not the most auspicious moment to begin a career in markets, but it was an education. Spreads were wide, equity markets were still in retreat, and somewhere in Washington a 76-year-old Fed chairman was preparing to cut rates to one percent. I learned to listen carefully to what Alan Greenspan said. More importantly, I learned to listen to what he did not say.

The dominant force in markets during May was the slow, uneven progress of ceasefire negotiations between the United States and Iran. Oil held above $100 a barrel for much of the month, pushing US consumer inflation to 3.8% year-on-year, its highest reading since 2023. The Federal Reserve, now under Kevin Warsh, held rates at 3.75% and offered no forward guidance. A cut by June, which many had expected earlier in the year, is no longer on the table. The tone shifted in the second half of the...