Manifesto week and the FCA under pressure

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This is the week that the election truly kicks off for the business community. Last week’s ITV debate between Sir Keir Starmer and Rishi Sunak didn’t reveal any tangible hints at how the major parties will woo business. However, the release of party manifestos this week should make the picture a little clearer.

The Guardian’s political editor Pippa Crerar has revealed the expected schedule for the manifesto releases. Should this prove to be accurate, the Conservatives will give their main rivals time to scrutinise their manifesto before Sky’s Starmer vs. Sunak showdown sequel on Wednesday.

A survey by Bloomberg released today shows the damage to the view of the Conservative party as a partner to enterprise. The survey of more than 250 portfolio managers, economists and retail investors, shows that more than half believe a Labour win would be good for the pound, while a Labour government is also seen as more likely to spur economic growth.

Rachel Reeves and Starmer have been working hard to win over the business community in the past few months. Reeves even went so far as to say that Labour is the “natural party of British business” a fortnight ago. 

The markets are crying out for political stability and Labour’s rumoured promise of a closer working relationship with the EU has been well received by analysts. The Conservatives haven’t given much away as far as economic improvements go but will have a struggle on their hands to change the tide of public sentiment.

Despite the noise, City minister Bim Afolami is pushing for the next government to ensure that independent regulators keep their eyes on the prize: economic growth. The government has been at odds with the Financial Conduct Authority’s perceived “clamp down, interfere, constrain and regulate more” approach.

He says: “All regulators are established either by government fiat or by statute. They are not judges nor a state of the realm. I think it is clear that parliament, not just Conservatives but a lot of the Labour Party, are now saying we have to make sure that our regulators think about economic growth. We’ve got to think at all times what [our actions] will do to growth and competitiveness. If the answer is that it’s not going to improve it, we shouldn’t be doing it.”

The comments come on the same day the Financial Times reports the FCA is planning the biggest overhaul of the country’s listing regime in 40 years. The regulator’s balancing act is clear, with its chief executive Nikhil Rathi saying the plans, which are aimed at making it easier for companies to join the London Stock Exchange, could leave the market exposed to a greater risk of “more things going wrong”.

The plans could be in place as early as mid-July. What a few weeks we have coming up…

Business Question

Guess the company

• SmithKline Beecham and Glaxo Wellcome agreed to merge, becoming Glaxo SmithKline
• BMW sells the bulk of the Rover Group to the Phoenix Consortium
• RBS completed a £21bn hostile takeover of NatWest
• Wembley Stadium closed after 77 years
• YouGov, Asos and Victorian Plumbing were founded

The answer can be found at the bottom of the page.

Business in Brief

Everything you need to know

1. UK unemployment is rising at the fastest pace of any OECD country, according to an analysis by the Trades Union Congress. It found that of its 38 member states, only Costa Rica suffered a similar rise in the number of people losing their jobs in the first three months of the year. Read more here.

2. London Tech Week is a prime opportunity for the UK to maintain its global leadership in AI, says Nicola Hodson, chief executive of IBM UK. The event is expected to attract up to 45,000 people, including the heads of Microsoft UK, Google Deepmind, Mastercard, Monzo and Darktrace. See more here.

3. Apple is set to reveal its long-awaited jump into generative AI at its annual Worldwide Developers Conference. The display of AI to be embedded in the iPhone and other Apple products will be the marquee moment at an event that traditionally previews the next version of the software that powers the company’s hardware lineup. Read more here. 

4. The administrators of The Body Shop are aiming to clinch a sale of the stricken cosmetics retailer by the end of the month. M&S and Next are among the rumoured buyers. The company’s former owner, the investment firm Aurelius, is not expected to submit an offer. You can read more here.

5. London-listed plant hire group Ashtead is considering leaving the LSE. The company, which trades as Sunbelt Rentals, says it is hampered by “the remuneration environment in the UK”. Read the full story here.

Business Quotes

Inspiration from leaders

“The way you behave when you think you can get away with it is who you really are.”
– Carly Fiorina

Business Thinker

Ideas on the future of business and leadership

1. Matt Moulding: the self-made entrepreneur who divides the City

2. Just 5 per cent of the main skills job candidates need today will be the same in three years

3. The story of Greggs’ success and what’s coming next, by the boss

And finally…

A clip went viral on X recently showing American economist Milton Friedman talking about the economics of a simple pencil. Not only is it a fascinating look at market economies, but it also is a beautiful insight into the power of collaboration. 

You can give it a watch here.

The answer to today’s Business Question is 2000.