To The Moon

Few events in the U.K. affect the markets, and this time the Conservative Party, led by "Indian" Prime Minister Sunak, is facing the worst election defeat in its history, and is being heavily criticized from both inside and outside the country.

On the other hand, the Communist Party, founded by former Prime Minister Tony Blair, who has a "platonic" relationship with Wendy Deng, won the election by a landslide and is in power for the first time in 16 years, which will have a significant impact on the UK's future economic policy.

Economic Policy Shift

1. Fiscal policy: Labor is likely to adopt a more aggressive fiscal policy, increasing public spending and investment.It is expected to raise the corporate tax rate and increase taxes on high-income groups.

2. Energy and environmental policy: Labor is committed to establishing a "Great British Energy" publicly owned energy company, increasing investment in renewable energy, and promoting the "Green Prosperity Plan" (Green Prosperity Plan) to accelerate the achievement of carbon neutrality goals.

3. Labor: Labor plans to raise the minimum wage to a real living wage, strengthen the power of unions, and improve worker protections.

4. Education and Social Welfare: Commitment to free breakfast clubs in all elementary school and a review of the Universal Credit system to tackle poverty.

Market impact

1. Equity markets.

   • Overall reaction is expected to be muted, as Labor's election victory was expected.

   • Renewable energy, infrastructure and education-related stocks are likely to benefit.

   • Private equity and high income related sectors may come under pressure.

2. Real estate market.

   • Labor's pledge to increase housing construction may create opportunities for real estate developers.

   • Changes in housing policy may affect real estate investment confidence.

3. Bond market.

   • Long-term Treasury yields are likely to rise in anticipation of increased government spending.

   • Labor's commitment to abide by fiscal rules may limit debt growth.

4. Sectoral impacts

   • Increase allocation to renewable energy, infrastructure and education.

   • Reduce exposure to traditional energy and high-income related sectors.

5. Tax Planning.

   • Prepare for possible corporate and personal income tax adjustments.

   • Watch for the impact of the elimination of the private school tax credit on related investments.

6. Long-term investment.

   • Focus on Labor's industrial policy, particularly its investment plans in emerging areas such as artificial intelligence.

   • Assess the impact of the National Wealth Fund on the long-term investment climate.