The Labour administration led by Prime Minister Keir Starmer has promised investment in key areas such as health and education, but also stresses the need to balance the books. This comes after government coffers were further hit by subsidies for energy bills after Russia’s invasion of Ukraine sent oil and gas prices rocketing. Starmer will want to avoid a repeat of October 2022, when the then-Conservative government’s proposed unfunded tax cuts spooked markets and tanked the pound.

Britain’s economy is currently on a more stable footing after exiting a mild recession and as inflation returns to normal. Ashley Webb, UK economist at Capital Economics research group, noted that Labour “will benefit from the economic recovery”. However, eight years after Britain voted for Brexit, businesses still lament the economic fallout caused by the country’s departure from the European Union, with little prospect of change soon.

Starmer has ruled out returning Britain to the European single market, customs union, or bringing back the free movement of EU nationals. British public debt has flirted with a level totalling 100 percent of the gross domestic product in recent months, a situation not seen since the 1960s. James Wood, senior teaching associate in political economy at the University of Cambridge, said that the reason for Starmer’s popularity is because he offered a changeless change.

Ahead of the election, Labour increasingly won the support of company bosses and key UK publications, including the Financial Times, who believe the party can successfully manage the economy. Business chiefs have urged Starmer to prioritize economic growth, with the Confederation of British Industry declaring that now is the moment to get behind growth.