Andrew Mann from JM Finn discusses the stock markets and economy with the upcoming UK general election approaching.

The UK general election campaign is now in full swing, and investors will rightly be asking what it could mean for investment portfolios.

Labour’s lead in the polls suggests a strong likelihood that we will soon have a new government, maybe ushering in a period of both political and economic stability.

Labour governments have historically received a relatively tepid response from the stock market in their first few weeks of office, but the current leadership under Keir Starmer appears to be much more centrist than we have experienced in recent times and with the more domestic-oriented FTSE 250 tending to outperform the FTSE 100 around Labour victories, for all of its challenges, and there are certainly many of them, the UK market still feels in a better position than for a number of years.

East Anglian Daily Times: Andrew Mann from JM FinnAndrew Mann from JM Finn (Image: JM Finn)

Uncertainty over longer-term changes to tax, regulation and stronger employment rights might create some nervousness of course, with the possibility of higher wage costs for example remaining a drag on the retail and hospitality sectors in particular.

Both parties remain focused on boosting affordable homes and reforming the planning system, so housebuilders could also come into focus.

Labour have suggested cutting red tape to expedite the approval process for new build properties, which might be good for those geared towards the lower end of the market, but regardless of who wins, the housing market will undoubtedly remain a key talking point.

Elsewhere, Labour looks likely to further increase the Energy Profits Levy (a levy on the profits of companies producing oil or gas in the UK).

That said, the likes of BP and Shell produce only a relatively small amount of oil and gas in UK waters, which should limit any effect.

As ever, it will be interesting to see what else is discussed in the coming weeks.