UK: Political realignment - Standard Chartered

Reform UK's rise signals growing voter dissatisfaction with traditional parties' policy agendas. An early election (before August 2029) is unlikely, leaving plenty of time for political fortunes to change. However, both Starmer and Badenoch could face leadership challenges in the coming months, Standard Chartered's economists report.

All to play for

"The UK has undergone a significant political realignment since last year's general election. Since winning a sizeable majority of seats just 14 months ago, public support for the Labour party has fallen by one-third; however, the Conservative party has failed to capitalise on this shift, also drifting lower in the polls. Instead, Nigel Farage's Reform UK has more than doubled its vote share, establishing itself as the UK's most popular political party. The Liberal Democrats and Greens have also made steady, albeit more modest gains and polls now regularly give all five parties more than 10% of the vote."

"Reform UK's political rise signals growing voter dissatisfaction with traditional mainstream parties and their policy platforms. The next election is not until August 2029, and we attach a low probability to an early election, so there is plenty of time for political fortunes to change. For Labour, this will require a clearer economic agenda and evidence of improvement on key metrics governing the economy, the NHS backlog and net migration."

"The Conservatives will need to challenge the government on its economic credentials while restoring credibility on tackling illegal immigration, not easy given their 14 years in power. Both Prime Minister Keir Starmer and Conservative leader Kemi Badenoch could face internal leadership challenges in the near future. Starmer will face a key test with the upcoming budget on 26 November, where further fiscal tightening is due, while both parties could face significant losses at next year's local elections."