The Green Party\u2019s Hannah Spencer won the Gorton-Denton by-election with over 40% of the vote. Labour placed third on 25%, behind Reform on 29%.<\/p>\n
Labour\u2019s 25% share was nearly half its 2024 result. The result places Labour behind both the Greens and Reform in this contest.<\/p>\n
TD Securities expects Keir Starmer to remain Prime Minister until after the May local elections. It adds that heavy Labour losses could lead to a leadership change and a new Prime Minister.<\/p>\n
The article states it was created with an Artificial Intelligence tool and reviewed by an editor.<\/p>\n
The by-election result in Gorton-Denton, where Labour fell to third place, signals significant political instability ahead. This kind of uncertainty is a clear indicator of market volatility to come. For traders, this means the calm in UK assets could be ending as we approach the May local elections.<\/p>\n
We should anticipate increased choppiness in the British pound, particularly against the dollar and the euro. We saw how quickly the pound collapsed during the political turmoil of 2022, hitting near-record lows below $1.04, and a similar period of weakness could be approaching. Traders might consider buying put options on the pound as a way to position for a potential decline driven by a leadership crisis.<\/p>\n
The UK government bond market, or gilts, will also become a focal point. Uncertainty over who will be Prime Minister and what their fiscal policy will be could cause gilt yields to rise sharply, as we witnessed with the spike in 10-year gilt yields to over 4.5% in late 2022. This suggests there are opportunities in trading interest rate futures or options to hedge against or profit from a sell-off in UK debt.<\/p>\n
UK stocks, especially those on the domestic-focused FTSE 250 index, are more exposed to this political risk than the international FTSE 100. A Labour leadership contest could stall domestic investment and harm consumer confidence, creating headwinds for these companies. We could see the FTSE 250 underperform in the coming months, making it a target for short positions.<\/p>\n
Overall, the primary trade is on rising implied volatility across UK assets in the eight weeks leading up to the May elections. The cost of options, which protect against sharp market moves, is likely to increase as political uncertainty grows. Positioning now for a more turbulent period could prove to be a prudent strategy.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Green Party\u2019s Hannah Spencer won Gorton-Denton by-election; Labour slumped to third, amid leadership-change speculation.<\/p>\n","protected":false},"author":103,"featured_media":17037,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-50404","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/50404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=50404"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/50404\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17037"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=50404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=50404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=50404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}