The UK goes to the polls on 4 July for a hotly anticipated general election. With manifestos being published and the usual media circus in full flow, we take a look at some of the key economic questions that are dominating the agenda ahead of the decisive day at the ballot boxes. With Anna Titareva, Jason Napier and Zachary Gauge of UBS. See omnystudio.com/listener for privacy information.
Hello and welcome to the Bulletin with UBS on Monocle Radio.
Each week, the sharpest minds and freshest thinkers in finance take you beyond the numbers and hype right to the heart of the big issues of the day.
This week we're training our lens right here on the United Kingdom.
On the 4th of July, the country goes to the polls in a hotly anticipated general election.
Whilst the vote was on the cards, the timing caught some observers perhaps a little by surprise.
With manifestos being published and the usual media circus in close to full flow, we thought it would be instructive to take a look at some of the key areas in economic terms before the decisive day at the ballot boxes.
So today we'll get a bit of a broad macro overview and then take a deeper dive into some specific sectors to hear how the timing of the vote, and more importantly, the direction of political travel post July 4th might shape the landscape or even the prevailing narrative.
Joining us today we have Anna Titareva, European and UK economist at ubs, Jason Napier, head of financials equity research in Europe for ubs, and Zachary Gage, who works in the European Rights equity research team covering UK listed real estate companies.
Let's start with that macro overview, courtesy of Anna Titareva.
Anna, always great to get your insights on the program.
A pleasure to talk to you this time with an eye towards the UK elections, obviously coming up this summer.
Just set the scene a little bit for us.
Anna, I guess big picture in macro terms, what do we anticipate in terms of the impact of calling an election?
I guess before we start talking about what's the cutting cycle going to be, just give us a sense of what the macro impact of these kinds of elections typically looks like.
Yes, thank you.
So, in terms of sort of imminent impact, I think we should expect a fairly limited impact.
We still think that broader macro factors will be at play.
Just to put it into context, in general, we expect that after a very strong start of the year, where we saw Q1 GDP expanding 0.6% quarter on quarter, we expect somewhat more moderate growth rates in the next couple of quarters and then a bit stronger reacceleration towards the end of the year, with, crucially, a recovery in household consumption.
Given that nominal wage growth remains strong and headline inflation has declined quite substantially, we expect that that should lead to recovery in real incomes and therefore boost household consumption.
So overall, we think that this should be the key driver of growth this year.