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History shows how a UK election can impact the country's stock market

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The MSCI UK index has been up by circa 6% six months after Labour victories and down circa 5% following Conservative wins, according to Citi.

The U.K. is heading for a General Election on July 4, and history may indicate a neutral to positive stock market reaction if the Labour Party ousts the Conservatives, analysts said.

A Labour victory would oust the right-wing Conservative Party led by Prime Minister Rishi Sunak, who announced the July 4 vote last week. Even if Labour does not achieve a parliamentary majority, it could seek a coalition partner with a smaller party to form a government unless the Conservatives deliver a surprise outperformance.

According to Capital Economics, the U.K. stock market has faltered on five occasions under past Labour governments.

 

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