Financial services activity is rapidly declining as investors are alarmed by the prospect of Andy Burnham leading the government. A survey by wealth manager Rathbones indicated that political uncertainty, driven by concerns over Burnham’s incoming administration, is a greater concern for businesses than high interest rates and inflation.
City analysts are keenly watching Burnham's choices for advisors, particularly concerning proposed reforms on land taxes and devolution. Former Bank of England deputy governor Andy Haldane, who has advised Burnham, has previously advocated for scrapping the triple lock pension and aligning pension tax reliefs to favor domestic assets over overseas ones. These potential policy shifts are contributing to apprehension within the financial sector.
Financial services contribute approximately 10% to the UK's national output, underscoring their vital role in the country’s economic growth. Elizabeth Hart, Senior Investment Director at Rathbones, noted that clients are questioning the "drama in Westminster" due to potential changes in taxation, pension rules, and overall financial planning under a new government.
