With elections in both the US and
Historically,
According to
Even when the governing party remains the same, markets record greater-thanaverage gains.
This time around is likely to be no different, at least as far as the
Polling consistently puts
However, speaking to Bloomberg,
"In the lead-up to this year's
The Conservatives are widely expected to announce another round of preelection sweeteners in the Spring Budget, with cuts to inheritance tax and income tax both mooted.
Although the opposition have stressed this will only take place if the fiscal situation allows, the Conservatives have argued the policy is fiscally reckless.
Paul warned that rash spending plans could throw the bond market into turmoil. "The more this occurs, the greater the likelihood of the return of the bond vigilantes," Paul said.
Analysts at
"That could help support Sterling on the margin and argue for somewhat tighter monetary policy, all else equal," they said.
Looking longer term, they pointed out that both parties were more favourable to forging closer ties to the EU than had been the case in the last few election cycles.
"This should help support the Pound on the margin, or at least prevent another structural shift in its external balances," they said.
There is a wider question, though, about markets in this extraordinary political year.
Around 3bn people will go to the polls this year - with elections in
Whether that creates opportunity - or forces dealmakers and money-movers to put their plans on hold - remains to be seen.
Buckle up.
5 BIG ELECTIONS THIS YEAR 13TH JANUARY
(c) 2024 City A.M., source