Miliband interventions could hit stock market prices, experts warn

 

Britain’s stock market rally could end over the coming months if the likelihood of a Labour victory at the next election grows, experts have warned. 

City fund managers are growing concerned that Ed Miliband’s economic policies will penalise some of the country’s largest companies and hit share prices across the London Stock Exchange.

It comes amid furore over Labour plans to limit the size of banks by forcing the big five high-street giants to give up “significant” numbers of branches to make way for new competitors.

Mr Miliband’s comments were criticised by business leaders and some consumer groups, who said that action was already under way to improve competition and that potentially breaking up the banks could mean that many people on low incomes – who may not be profitable customers – could be left without current accounts.

Chris White, head of UK Equities at Premier Asset Management, which has £2.5bn of assets under management, said: “We have already started to see the impact of politics on the market with the debate over electricity prices. The effect on utility companies has been profound, with shares in Centrica and SSE falling sharply. In fact, whatever your politics, it is becoming clear that a Labour government could be bad for many areas of the market. Labour also has no love for the defence industry or the newspaper industry. Will the food retail industry, real estate companies or consumer credit companies be targeted? Tot it all up and it is a large percentage of the UK stock market.”

Supporters of the Leader of the Opposition say his proposals will ultimately benefit the economy. On Friday, shares in Royal Bank of Scotland and Lloyds fell, although Labour insisted that reform was necessary to inject competition into a “broken” banking system and increase the flow of credit to small businesses.

Will Nicholls, market analyst at Capital Spreads, said: “Ed Miliband has recently expressed his desire to make the banking industry more competitive by forcing two new players into the markets and redistributing bank branches.

“This may well turn out to be great policy and result in the smaller businesses getting the investment they need, but one thing is for certain, it won’t be good for the share prices of the more established banks.

“Nor will his policy be good for the energy companies – he likened the banking system to the energy sector where too much power is concentrated in too few hands.”

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

The Green Recruitment Company: Graduate Energy Analyst

£20000 Per Annum: The Green Recruitment Company: Summary: The Green Recruitm...

Day In a Page

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'
Singapore's domestic workers routinely exploited and often abused in the service of rich nationals

Singapore's hidden secret of domestic worker abuse

David Cameron was shown the country's shiniest veneer on his tour. What he didn't see was the army of foreign women who are routinely exploited and often abused in the service of rich nationals
Showdown by Shirley Jackson: A previously unpublished short story from the queen of American Gothic

Showdown, by Shirley Jackson

A previously unpublished short story from the queen of American Gothic
10 best DSLRs

Be sharp! 10 best DSLRs

Up your photography game with a versatile, powerful machine
Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash