All Things Political in the UK, US and Brazil

19 May 2017

Jon Chitty

UK Party Manifestos

This week we saw the publication of election manifestos by the major UK political parties. Labour kicked things off on Tuesday, and although we already had a good idea of what to expect thanks to draft versions leaked to both the Daily Telegraph and the Daily Mail there were still some talking points. At 128 pages long, the Labour manifesto (available in full here, though you may find the the BBC’s summary of key points more accessible) contains a lot of information for voters to digest, and when compared to the Miliband and Blair years the content represents a move to the left of the political spectrum. Key policies include the nationalisation of several key industries, a guarantee of the ‘triple lock’ for the state pension and increased taxation for high earners and companies. At 88 pages, the Conservative manifesto (available in full here, with the BBC’s summary found here) is slightly more succinct, and its focus is on the need for “strong and stable government” to address the “giant challenges” facing the UK as the terms of Brexit are negotiated. Policies include increased funding for the NHS, scrapping the pensions ‘triple lock’ and covering the cost of social care by increasing the contribution from estates after death. At 100 pages long the Liberal Democrat manifesto (in full here, key points here) sits between the Conservative and Labour manifestos both politically and in length. With only 9 seats in parliament the Lib Dems are less relevant to UK politics than they have been in the past, and their most notable policy is the promise of a second referendum on the UK’s Brexit deal. The general election will take place on Thursday 8th June.

Political risk in the US…

Most of the accusations levelled at US President Donald Trump since he took office have been of little consequence, but those relating to suspected ties with Russia refuse to go away. Trump’s sudden and unexpected dismissal of FBI director James Comey has attracted a lot of attention, and his seemingly contradictory statements about his motivations have done little to reassure. Rumours emerged this week that President Trump urged Comey to close down the FBI’s investigation in to former national security advisor Mike Flynn, and though The White House denies these allegations the US Justice department has deemed it necessary to appoint former FBI head Robert Mueller to investigate. US equity markets are only down a couple of percent and remains near all-time highs, but talk of a presidential impeachment is in the air. Markets have already found support following the initial drop, and though this story is clearly negative it is likely to take a long time before any firm conclusions are drawn.

…and in Brazil

Both the stock market and the real (currency) plunged in Brazil this week as corruption allegations spooked investors. Taped evidence of President Michel Temer encouraging pay-offs to a former associate have increased the probability that he will be forced to step down, calling in to question the sustainability of the government’s reformist agenda. Brazilians are no strangers to corruption having impeached the previous president Dilma Rouseff in 2016, and her mentor – former president Lula da Silva- is also standing trial for corruption. Reassuringly the stock market falls seen in Brazil have not spread to other emerging markets.

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