As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened.

Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability.

Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis.

This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable.

Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers.

In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common.

According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK.

British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil.

While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration.

This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks.

However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures.

The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually.

To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns.

Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention.

(With inputs from Reuters)

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023.

As the UK's Labour Party aims for power in the upcoming July election, its historically adversarial stance towards banks has softened. Under the leadership of Keir Starmer, the party has garnered support from business owners and financiers by promising stability and a balanced approach to taxing the financial sector, which contributed over $139 billion in tax receipts in 2023. However, despite this rapprochement, some of Labour’s proposed policies could still impact the sector's profitability. Starmer’s Labour has promised to improve the financial stability of households, many of which have been struggling due to more than two years of mortgage market instability and a cost-of-living crisis. This includes a review of the advantages of longer-term fixed-rate mortgages, intending to protect homeowners from sudden interest rate changes and make homeownership more attainable. Analysts, lenders, and brokers believe that this could result in broader changes in mortgage and financial products, potentially shifting the balance in favour of consumers. In the UK, traditional mortgage products differ from those in the US, Germany, Denmark, and the Netherlands as they put all the interest rate risks on borrowers. Unlike in these countries, long-term fixed-rate mortgages are more common. According to Reuters, Daniel Austin, CEO of ASK Partners, pointed out that a 10-year fixed-rate mortgage is always more expensive, which creates a potential cost barrier for such products in the UK. British lenders manage risk differently, often through interest rate swaps, which have become more expensive due to recent political and economic turmoil. While Labour has ambitious policies, it is not anticipated to implement a bank windfall tax or make significant changes to the Bank of England's interest payments to banks, both of which were previously under consideration. This aligns with Starmer's overall pro-growth position, which is widely believed to be advantageous for UK banks. However, some Labour policies may reduce bank profits in the long run. The party's commitment to establishing up to 350 'banking hubs' over the next five years contradicts the cost-cutting strategies of many banks. Shadow finance minister Rachel Reeves characterised this plan as a means to rejuvenate communities affected by widespread branch closures. The 'Freedom to Buy' scheme by Labour is designed to help 80,000 first-time buyers over five years. However, it's unlikely to have a significant impact on banks' mortgage volumes, which total over one million annually. To improve the situation, the industry needs to educate customers about how they can optimise their finances by switching their savings or mortgage products to achieve better returns. Furthermore, the overall context of declining interest rates is expected to put pressure on bank profits. James Daley, the managing director of Fairer Finance, highlighted that banks' profits will face additional scrutiny in the credit card and current account markets as consumer value becomes a focus of regulatory attention. (With inputs from Reuters)

Britain's labour party woos banks but risks profit squeeze

The Oxford dictionaries has&nbsp;recognised &quot;youthquake&quot; as the 2017 word of the year.&nbsp;

The recognition has been granted since there was a fivefold increase in the use of the term between 2016-2017.&nbsp;

The word introduced by Vogue editor Diana Vreeland 50 years ago, was first used to describe sudden changes in fashion, music and attitudes.&nbsp;

The recent changes being referred to described young people driving political change.&nbsp;

Oxford Dictionaries&#39; Casper Grathwohl had said that the use of the word peaked during the June general election in the United Kingdom after polls delivered unexpected result for Labour party.&nbsp;

It describes the surging youth support for Britain&#39;s Labour party and the election of 30-something leaders in France and New Zealand. 
 
Every year the Oxford dictionary releases a word from the English language on the basis of the usage of the word.

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The word describes the surging youth support for Britain's Labour party

The Oxford dictionaries has recognised "youthquake" as the 2017 word of the year. The recognition has been granted since there was a fivefold increase in the use of the term between 2016-2017. The word introduced by Vogue editor Diana Vreeland 50 years ago, was first used to describe sudden changes in fashion, music and attitudes. The recent changes being referred to described young people driving political change. Oxford Dictionaries' Casper Grathwohl had said that the use of the word peaked during the June general election in the United Kingdom after polls delivered unexpected result for Labour party. It describes the surging youth support for Britain's Labour party and the election of 30-something leaders in France and New Zealand. Every year the Oxford dictionary releases a word from the English language on the basis of the usage of the word.

'Youthquake': Oxford Dictionaries' word of 2017

Jeremy Corbyn has been re-elected leader of Britain&#39;s&nbsp;Labour party, beating rival Owen Smith by a comfortable margin and promising to unite the bitterly divided party which had passed a vote of no&nbsp;confidence against him after June&#39;s Brexit referendum. 
 
The veteran politician, who won by 313,209 to 193,229 votes, asked his party members to work together to fight the Conservatives. &nbsp;&quot;Always remember in our party we have much more in common than that which divides us,&quot; he said to a crowd of cheering supporters. Let&#39;s wipe that slate clean and get on with the work we have got to do as a party together,&quot; he said at the party&#39;s annual conference in Liverpool. 
 
Moderate lawmakers from his party fear that his left-wing agenda can never deliver victory at the polls and will allow the ruling Conservatives a free hand to set Britain&#39;s divorce from the EU.&nbsp; 
 
His speech is expected to assuage fears that his re-election will widen the divide between the Labour Party&#39;s left and right wings and that he will work to force centrist lawmakers from the party. 
 
The Conservatives, meanwhile, launched a campaign, highlighting the divisions in the Labour party with the slogan: &ldquo;We have a winner, but it isn&rsquo;t Britain,&rdquo; the Guardian reported. 
 
Mr Corbyn was first elected the Labour party&#39;s leader in September 2015.&nbsp; 
 
(WION)

The win cements his authority over the divided party and will fuel his drive to turn it further left

Jeremy Corbyn has been re-elected leader of Britain's Labour party, beating rival Owen Smith by a comfortable margin and promising to unite the bitterly divided party which had passed a vote of no confidence against him after June's Brexit referendum. The veteran politician, who won by 313,209 to 193,229 votes, asked his party members to work together to fight the Conservatives. "Always remember in our party we have much more in common than that which divides us," he said to a crowd of cheering supporters. Let's wipe that slate clean and get on with the work we have got to do as a party together," he said at the party's annual conference in Liverpool. Moderate lawmakers from his party fear that his left-wing agenda can never deliver victory at the polls and will allow the ruling Conservatives a free hand to set Britain's divorce from the EU. His speech is expected to assuage fears that his re-election will widen the divide between the Labour Party's left and right wings and that he will work to force centrist lawmakers from the party. The Conservatives, meanwhile, launched a campaign, highlighting the divisions in the Labour party with the slogan: “We have a winner, but it isn’t Britain,” the Guardian reported. Mr Corbyn was first elected the Labour party's leader in September 2015. (WION)

Jeremy Corbyn re-elected leader of Britain's Labour Party, promises to 'wipe slate clean'