Amanze Chinonye
UK Prime Minister Keir Starmer’s keynote speech at the Labour Party conference on Tuesday is being closely monitored by investors, businesses, and global bond markets, amid heightened concerns over fiscal credibility and economic direction.
Financial advisory giant deVere Group warned that the address carries make-or-break implications for Britain’s standing with international lenders. “This is not just another party conference address. It’s a make-or-break moment for credibility,” said Nigel Green, the firm’s CEO.
Markets remain wary following recent policy moves under Chancellor Rachel Reeves, who introduced a £25 billion payroll tax increase in her first Budget.
Join our WhatsApp ChannelThe hike has coincided with declining job vacancies, rising unemployment, and corporate unease. Green pointed to further strains from the abolition of non-dom tax status and successive levies on sectors including energy and entrepreneurship, which he said have chilled investment and accelerated capital flight.
“Businesses need certainty, not surprises,” Green stressed. “Repeated tax raids, from windfall levies on energy to higher capital gains for entrepreneurs, have sent a chill through the economy. What markets and corporate Britain want to hear today is that there’ll be no further shocks.”
READ ALSO: UK Bond Market Issues Truss-Era Warning as Reeves Prepares First Budget
UK Pledges Stronger Cybersecurity Partnership with Nigeria Amid Rising Cyber Threats
The banking industry is on edge over speculation of new levies, including potential cuts to the interest earned on deposits held at the Bank of England.
Pension funds and asset managers are also pressing for guarantees that long-term retirement saving incentives will remain intact.
Global bond markets are already demanding a premium from the UK. The yield on the 10-year gilt is hovering near 4.73%, while the 30-year gilt has climbed above 5.74%, levels not seen since the late 1990s.
Any hint of fiscal looseness in Starmer’s speech, analysts warn, could push borrowing costs higher overnight.
Memories remain fresh of the market turmoil triggered by Liz Truss’s 2022 mini-budget, when unfunded tax cuts sent sterling plunging, gilt yields soaring, and forced the Bank of England into emergency intervention.
“The cautionary tale remains fresh,” Green said. “No leader should ever underestimate again how swiftly global capital will turn away if it senses risk.”
Yet analysts say the moment also offers opportunity. With credible commitments, the UK could restore its reputation as a reliable investment destination, attract fresh foreign direct investment, and ease borrowing costs.
Green concluded: “This speech must send a clear signal to bondholders and businesses that Britain is stable, serious, and open for growth. Success would likely deliver benefits of cheaper financing, stronger investor appetite, and momentum for an economy that urgently needs it.”
Starmer’s address is expected to set the tone for Labour’s economic strategy at a time when confidence from both markets and businesses remains critical to sustaining growth.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
