What Labour victory means for India-UK ties & markets? Arnab Das explains

How will the markets look at Labour victory in the UK? India has been a different story altogether with the markets bracing for continuity, But the UK is different. What is your view on the near-term performance of the markets is concerned?
Arnab Das: This is largely priced in. Not an enormous amount is going to change in the short run. The UK’s economic problems, and policy challenges, are deeply structural and I do not think Labour is going to be able to fix them in a big way. A big part of the story here that Labour is selling to the electorate, is about stability. We have had an enormous amount of turmoil here in the United Kingdom. Any number of prime ministers and an even larger number of chancellors, and finance ministers, have been coming and going. Lots of budgets, interim budgets, and main annual budgets have made important changes. We already have the highest tax burden as a share of GDP in the UK in three generations. So, there has been a lot of change, a lot of turmoil, and a lot of disruption from Brexit, partly due to the pandemic, and partly due to bad policy choices.

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Offering CollegeCourseWebsiteIIM LucknowChief Executive Officer ProgrammeVisitIndian School of BusinessISB Chief Technology OfficerVisitIIM LucknowChief Operations Officer ProgrammeVisitSo stability is going to be a big part of the story in the short term. Now, stability is going to help. It is not going to solve the productivity puzzle that this country faces and the stagnation that has resulted from that. So, there is going to have to be some change over a longer period. But how we get to that change and what changes specifically are made will take time to see. It will take time to see how they play out in the performance of the economy. I would guess that they do not make that much difference and so I do not think the markets are going to react in a big way.