Labour Party voters are growing increasingly concerned that the party's leadership change could drag the government further left, according to a recent City AM/Freshwater Strategy poll. The poll found that a majority of voters worry a change in leadership would lead to increased public spending and lower taxes.
The poll comes after Labour's devastating council election results, which saw the party suffer significant losses. Despite this, the party's leadership contest is gaining momentum, with Andy Burnham emerging as the preferred next leader for Labour.
The poll also revealed that 29 per cent of voters believe Labour would be more likely to increase taxes and reduce public spending under a new left-wing leader. Conversely, 21 per cent of voters think the party would be more likely to support lower taxes and reduced public spending under a new leader.
The implications of a Labour leadership shift could be significant for UK households and businesses. Increased public spending and lower taxes could lead to higher inflation and increased borrowing costs, potentially affecting mortgage holders and savers.
In a statement, a Labour spokesperson said the party is committed to 'a fairer and more equal society' through its fiscal policies. However, the party's stance on taxation and public spending remains unclear.
The Bank of England has kept interest rates at 5.5 per cent, with a 2.5 per cent forecast for 2026. However, a Labour leadership shift could potentially influence the central bank's decisions, given the party's proposed fiscal policies.
The FTSE 100 has been experiencing volatility in recent weeks, with the index currently trading at around 7,400. A Labour leadership shift could potentially impact the FTSE 100, given the party's proposed changes to taxation and public spending.