BlueBay AM: Commentary on the announcement of Liz Truss' resignation as the UK Prime Minister
BlueBay AM: Commentary on the announcement of Liz Truss' resignation as the UK Prime Minister
Neil Mehta, Portfolio Manager at BlueBay Asset Management, comments on the announcement of Liz Truss' resignation as the UK Prime Minister.
A political reset would continue to erase the risk-premium embedded in UK assets after the ill-fated Truss/Kwarteng mini-budget. Particularly if front-runner Rishi Sunak becomes PM and implements more orthodox conservative economic policy.
With Jeremy Hunt as chancellor, we could see a more meaningful shift towards a more centrist government, with more focus on the economy rather than populist areas such as migration and Brexit.
This will likely embolden Gilts and the pound, but the longer terms challenges facing the UK economy on cost of living and inflation will unlikely abate – with a Labour government in the waiting.
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