Labour Party wins UK election in a landslide: Live updates
The U.K. housebuilding market is set to benefit from an incoming Labour government, several bank analysts wrote in research reports Friday.
In a note, analysts at RBC Capital Markets said that if Labour's election pledges turn into policy , this could mark the dawning of a "new age" for U.K. housebuilding.
"Over the last few years housebuilders' potential has been hamstrung, but over the next few this potential is likely to be unleashed," the bank's analysts wrote in their note.
"If the new Government's walk matches its talk we expect the sector to re-rate, and in the very short term we suspect that the talk alone will be enough to lift share prices," they added.
Expect to see the reinstatement of housing targets, refining of the greenbelt, a reform of planning, and the announcement of a "new generation of new towns," the RBC Capital Markets analysts wrote.
Meantime, Investec analysts said they expect housebuilders to "benefit from a more supportive planning backdrop as a significant part of the political hiatus around planning is removed."
"Even in the absence of any significant new policy support aimed at the first-time buyer and demand side, expected interest rate cuts should ease affordability constraints and boost sentiment."
"With negligible build cost inflation, a more favourable demand and supply backdrop should support a recovery in 2025," Investec's analysts added.
- Ryan Browne
The house building sector stands to be a major beneficiary of the Labour Party's landslide victory in the Thursday general election, RBC's head of European capital goods research told CNBC's Silvia Amaro.
"It's front and center great for house builders, great for the wider building supply sector, bricks," Mark Fielding said Friday, pointing to two driving factors. "Two big factors: firstly a return to mandated targets for house building supporting 1.5 million new homes over the next five years, which would be a big positive, and secondly hopes on planning reforms, targeting to get that done."
That will in turn allow for faster planning processes and potentially for additional central government intervention to press ahead with more house approvals, according to Fielding, who noted that investor focus will otherwise now narrow on the Labour Party's ability to deliver on broader economic growth.
"U.K. bank stocks in the end are one of the biggest proxies for U.K. economic growth," he said.
— Ruxandra Iordache
With Labour now destined for power in the U.K., analysts are now discussing what this might mean for the Bank of England and interest rate expectations.
Sanjay Raja and Shreyas Gopal from Deutsche Bank sent the below comments in a flash research note:
"A Labour majority won't do much to shift rate expectations – at least not at this juncture. If anything, we expect Labour to a) set out a cautious fiscal path, with some modest increases to 2025/26 departmental spending alongside key policy objectives (such as its Green Prosperity Plan), which will largely be offset by tax hikes. There are risks to this view, however. Further net fiscal easing at the Autumn Budget, than we've pencilled in, could lead to a more cautious and gradual rate cut path relative to our basecase – particularly if growth continues to converge back to potential."
-Matt Clinch
In the formerly Brexiting, euroskeptic U.K., the pendulum has just swung back to the center-left Labour Party, which is set to come to power after a mammoth election win , ending 14 years of Conservative Party rule.
A different picture is playing out in much of western Europe — and in countries that disdained Brexit and the U.K.'s populist trend in recent years over the last decade or so. These states are now seeing their own electorates shift to the right.
While the U.K. and mainland Europe are heading in different directions politically, analysts say that the driving force behind changing patterns at the polls is fundamentally the same: voters are desperate for change.
Read the full story here.
The U.K.'s Labour party is set to take over from the Conservatives after 14 years, at a time when economic uncertainty is still rife in the country.
The two main political parties ran on different economic and financial manifestos during the election campaign that would likely have different consequences for the investing environment.
Housebuilding, utilities and airspace stocks are some of the sectors that could be impacted by the new government, experts told CNBC. The wider property and housing market is also set to be affected, while the British pound and bond markets are unlikely to react to the change in government.
Read the full story here.
— Sophie Kiderlin
Markets appeared to shrug off the end of a 14-year Conservative rule in Britain, after polls widely suggested the victory of the opposition Labour Party — suggesting a previous pricing in of the result.
The British pound made only light gains early morning on Friday, following departing Prime Minister Rishi Sunak's concession speech.
The currency was up just 0.06% and 0.03% against the U.S. dollar and euro at 06:28 a.m. London time, respectively.
"The headline results from the election – a large Labour majority and the Conservatives in second place – are completely in line with expectations," Deutsche Bank analysts said in a Friday note, stressing that a Labour takeover generated a "very positive UK market (FX, bonds, stocks) reaction within hours" of new Chancellor Gordon Brown taking office back in 1997 and giving the Bank of England independence from political control over the nation's monetary policy.
"We don't think the market had built in a material positive risk premium in the pound for this outcome ahead of the election. As such, we'd expect sterling to [be] broadly unchanged following tonight's results," Deutsche Bank said, stressing that investors' focus will now shift toward the second round of the French vote on Sunday and on the next set of U.K. data as an indicator for whether the Bank of England can proceed with cutting interest rates in August.
— Ruxandra Iordache
The Conservative party lost several of its most high-profile members of parliament in the election, with Jacob Rees-Mogg, Penny Mordaunt and Grant Shapps among those failing to secure another term.
Mordaunt, the leader of the House of Commons, narrowly lost in Portsmouth North, coming second to Labour candidate Amanda Martin by just 780 votes.
Labour won 34.8% of votes, while the Conservatives secured 33%, which was a sharp decline from the last general election when the party won over 61%.
High-profile backbencher Jacob Rees-Mogg also lost his seat in parliament after winning 30.2% of votes in North East Somerset and Hanham, while Labour's Dan Norris secured 40.6%. Rees-Mogg had been an MP since 2010 and played a key role during Brexit.
Elsewhere, Defence Secretary Grant Shapps lost to Labour's Andrew Lewin in Welwyn Hatfield, with the two securing 33.2% and 41% respectively.
— Sophie Kiderlin
Labour leader Keir Starmer delivered a victory speech in London as the voting confirmed that he will be the next prime minister of the U.K.
"We did it," he said, addressing his Labour collegaues. "You campaigned for it, you fought for it - and now it has arrived."
"Change begins now ... The sunlight of hope, pale at first but getting stronger through the day. Shining once again on a country with an opportunity after 14 years to get its future back."
Labour has now crossed the 326 seat threshold, meaning it can govern alone in the U.K.'s lower house of parliament.
-Matt Clinch
After 14 years in opposition, the Labour Party is near-guaranteed to win a sizeable majority in the next parliament, according to exit polls.
Many of its senior figures, including party leader Keir Starmer, deputy leader Angela Rayner and finance chief Rachel Reeves, have never served in government.
In a manifesto released in June , the party said it would focus on "wealth creation" and "economic growth." Reeves, who has long been on a charm offensive with the British business community, has repeatedly stated she will prioritize fiscal discipline in all policymaking.
The party's flagship pledges include the creation of a new publicly owned energy company, a ban on awarding new North Sea oil and gas licenses, reducing patient waiting times in the strained National Health Service, and renationalizing most passenger rail services.
It also plans to raise money for public services by cracking down on tax loopholes for so-called nondomiciled individuals , removing tax breaks for independent schools, closing what has been described as a "tax loophole" for private equity investors, and raising taxes on the purchases of residential properties by non-U.K. residents. It said it would make additional green investments through a "time-limited windfall tax" on oil and gas firms.
The party said it would recognize a Palestinian state, calling statehood "the inalienable right of the Palestinian people."
— Jenni Reid
Leader of Reform UK Nigel Farage said the gains his party has seen so far are "almost unbelievable."
Speaking after the earliest official results put Reform in second place, the populist Brexiteer noted this outcome was "way more" than anyone expected.
"What does it mean? It means we're going to win seats, many, many seats," he said in a video post on X.
"Mainstream media are in denial, just as much as our political parties. This is going to be 6 million votes plus. This vote is huge."
In terms of vote share, at the time of writing, Reform was in second place with 23.8% of the vote — a 14 percentage point increase on 2019. Exit polls put the party's seats at 13.
— Katrina Bishop
Labour's shadow finance minister Rachel Reeves is expected to become the U.K.'s first female chancellor, which she said would be a "huge privilege."
Speaking to Sky News, Reeves said she was under "no illusions about the scale of the challenge" she will face" if she does take up the role. Labour is forecast to win a landslide victory in the U.K.'s general election, and Reeves is also expected to hold her seat.
"The severity of the inheritance from the Conservatives is truly awful. But we will get to work, starting to rebuild our economy, returning stability to the economy, and improving our health service and our schools after 14 years of chaos, division and decline," she said.
Reeves has long been on a charm offensive with the British business community, repeatedly stating she will prioritize fiscal discipline in all policymaking.
— Katrina Bishop
Along with a huge vote for Labour and severe losses for the Conservatives, one of the major themes of the night so far has been the apparent gains by Reform UK.
It is forecast to win 13 seats and has significantly increased its vote share in early seats that have been declared.
The populist, right-wing party with a hardline stance on immigration was born out of the Brexit Party, which was founded by Nigel Farage and focused on calling for a "no-deal Brexit" between 2016 and 2021. After the completion of the Brexit process, it campaigned on issues such as opposition to Covid lockdowns.
The Brexit party did not win any seats in the 2019 general election.
Farage, who has served in the European Union parliament (on a pro-Brexit stance) but repeatedly failed to win a seat in the U.K. legislature, stepped down as party leader in March 2021. After previously stating he would not stand as an MP in 2024 in order to focus on supporting Donald Trump's U.S. presidential campaign, he reversed course in June and said he would both stand and resume his role as Reform UK leader.
Numerous analysts argued that the return of the well-known figure would boost the party at the expense of the Conservatives.
David Bull, co-deputy leader of Reform UK, told the BBC during overnight vote counting that pollsters had underestimated the party's support, as they had with the number of people who would back a Brexit vote.
"I think what you're seeing is actually the shy Reformers coming out in droves. We saw this with Brexit didn't we, the shy Brexiteers, so the pollsters were caught off-guard and once again they've been caught off guard," Bull said. "If that is true and we win 13 seats that is extraordinary."
A "shy" voter refers to someone who does not reveal in polls which way they will eventually vote.
— Jenni Reid
Exit polls have a strong track record of getting it right in Britain.
Investec notes they have correctly called the largest party (Conservatives) in the last four elections, with a mean absolute error of the overall majority of just 11.
"Exit polls ask the way that voters have actually voted in contrast with polls published during the campaign, which model voting intentions," Investec U.K. chief economist Philip Shaw wrote late Thursday.
"One can expect the actual outcome to be reasonably close to the [exit poll] figures ... With tactical voting perhaps more widespread than in previous elections however, perhaps one should not be too confident about this."
Rob Wood, chief U.K. economist at Pantheon Macroeconomics, issued a note of caution, however, highlighting that in 1974, exit polls overestimated Labour's seats by 61. In recent history — over the last 30 years — the largest exit poll mistake came in 2019, when the Conservative's seats were underestimated by 15, Wood added.
After the first few results are announced before midnight London time, Investec said it expects a "particularly busy period of declarations between 03.00 and 04.00 a.m."
"A full set of results is expected by 07.00 tomorrow morning, although this may be delayed by recounts in various constituencies," Shaw wrote. "One further complication could arise if postal votes having been sent out late in certain areas were to lead to challenges by candidates who lost by a narrow margin."
He added that currency markets have hardly reacted, given the forecasted result was widely expected. "What will matter more to markets, ultimately, is what a Labour government chooses to do if and when it takes office."
— Katrina Bishop
Keir Starmer is on course to be the U.K.'s new prime minister, with exit polls suggesting his left-of-center party could have a majority of around 170 seats.
He will take the post from Rishi Sunak , who was elected between general elections by members of his Conservative Party in 2022.
Starmer, 61, has had a rapid political ascent after entering U.K. parliament less than a decade ago. But many Brits still know little about the man who has positioned himself as the country's candidate for change.
Starmer was born in 1962 in London, England, to a father who worked as a toolmaker and a mother who worked as a nurse. A barrister (or trial lawyer), he served as a human rights adviser during former Labour Prime Minister Tony Blair's landmark Northern Ireland Good Friday Agreement , and in 2008 became the head of the U.K.'s Crown Prosecution Service.
Starmer was knighted in 2014 for his services to criminal justice and was elected to Parliament the following year, serving as shadow immigration minister and Brexit minister for the opposition.
Read the full story here .
— Karen Gilchrist
The first seat of the 2024 general election has been called for Labour in the constituency of Houghton and Sunderland South.
Bridget Phillipson, Labour's education chief, was declared the first member of the U.K.'s new parliament. She said that if exit polls were correct, "then after 14 years, the British people have chosen change."
Labour held the Houghton and Sunderland South seat, but the candidate for the Nigel Farage-led Reform UK party made a significant gain on its 2019 result (when it was called the Brexit Party), leapfrogging the Conservatives into second place.
Several constituencies in northern England race to be the first to declare in a general election.
In the 2017 and 2019 votes, Newcastle took that honor with announcements in less than 90 minutes of polls closing. Between 1992 and 2015, Sunderland was the first to declare its seat.
— Jenni Reid
The scale of the projected Conservative loss stems from smaller parties' gains as well as Labour's challenge, polling expert John Curtice told the BBC.
The seat forecast shows how the national share of the vote has "moved decisively against the Conservatives," he said.
"Support for the Conservatives is falling much more heavily in places where they are trying to defend a seat than it is in places that Labour already hold," he said.
"It's not because Labour are doing spectacularly better in Conservative-held seats, it's because Reform are. Much of the damage done to the Conservative Party tonight is being done by Reform, even if it is the Labour Party that proves to be the beneficiary."
Reform UK is the populist right-wing party led by Nigel Farage.
He also noted that although there has not been a massive rise in overall Liberal Democrat support, the party is doing better in seats where it was challenging the Conservatives, he continued, cautioning that the patterns shown by the polls may not be exactly accurate.
"Although it looks like an election in which Labour win a landslide, it does not follow that this necessarily means Labour have got a landslide in terms of votes," he told the BBC.
— Jenni Reid
The first seat of the 2024 general election has been called for Labour in the constituency of Houghton and Sunderland South.
Bridget Phillipson, Labour's education chief, was declared the first member of the U.K.'s new parliament. She said that if exit polls were correct, "then after 14 years, the British people have chosen change."
Labour held the Houghton and Sunderland South seat, but the candidate for the Nigel Farage-led Reform UK party made a significant gain on its 2019 result (when it was called the Brexit Party), leapfrogging the Conservatives into second place.
Several constituencies in northern England race to be the first to declare in a general election.
In the 2017 and 2019 votes, Newcastle took that honor with announcements in less than 90 minutes of polls closing. Between 1992 and 2015, Sunderland was the first to declare its seat.
— Jenni Reid
While an overall Labour victory has been forecast by pollsters, many seats are considered too close to call — including those of British Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt.
There are around 120 of 650 seats where the margin of victory is expected to be lower than 5 percentage points, according to a projection model from the Financial Times.
Well-known politicians will be seeking to avoid what in British political lingo has become known as a "Portillo moment." That is a reference to former Conservative politician Michael Portillo, who lost his seat in the 1997 general election to Stephen Twigg, his relatively unknown Labour opponent. Portillo, meanwhile, was a big name who had served as defense minister and was considered a potential future party leader.
The shock result was seen as emblematic of the swing in Labour's favor, as the party won a landslide under Tony Blair against incumbent Prime Minister John Major.
— Jenni Reid
