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
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links