UK Makerfield Could Decide Starmer's Future

The Makerfield by-election could pave the way for Andy Burnham to challenge Keir Starmer's leadership, creating market uncertainty regarding UK fiscal policy. Investors fear a shift toward more expansionary spending, which may negatively impact UK gilts and the currency.

Key Takeaways

• 1.The Makerfield by-election is a critical catalyst that could facilitate Andy Burnham's return to Parliament and a subsequent leadership challenge against Keir Starmer.
• 2.Markets are concerned that an Andy Burnham-led government would be more fiscally expansionary, potentially testing the limits of fiscal discipline and pressuring UK gilts, equities, and sterling.

Table of Contents

• UK: Makerfield Could Decide Starmer's Future
• Increasing divergence between long and short rates

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