Report: Power Struggle in the UK may Drag Down Business and Consumer Confidence

RSM UK's Thomas Pugh stated in a report that the battle to replace Keir Starmer as Prime Minister of the UK could impact the confidence of businesses and households. He said that polling experts believe that his potential successor, Andy Burnham, has a 75% chance of winning the upcoming special election, possibly leading to a leadership challenge. "A leadership contest focused on ideas of raising taxes or borrowing could weaken business and consumer confidence, triggering financial market panic and dragging down economic growth, similar to how the previous two budgets effectively caused the country's economy to stagnate." "While Andy Burnham has promised to adhere to fiscal rules, he has also expressed a desire to increase spending." "This means more taxes and borrowing, and the possibility of higher UK bond yields in the coming years," Pugh said.