The Mid-Year Investment Report

The first half of 2026 has seen constant headlines on geopolitical tensions, domestic political upheaval, and uncertainty around inflation and interest rates. But how much of this actually impacts your long-term investment strategy?

Watch our 30-minute recording with Tom Caddick, our Chief Investment Officer, and Louis Hutchings, Portfolio Manager at Nedgroup Investments, as they cut through the noise and focus on what really matters for investors.

Louis Hutchings: Reaction to Kier Starmer’s resignation – 22.06.26

Andy Burnham’s victory in the Makerfield by-election has moved the UK political story on quickly. Following Keir Starmer’s resignation on Monday, and Wes Streeting’s decision to back Burnham rather than challenge him, Burnham now looks highly likely to become the next prime minister.

A Burnham-led government would likely take Labour’s policy agenda further to the left. But there are already signs that some of his more forceful rhetoric is being tempered, particularly after his comments that the UK should not be “in hock” to the bond market.

That matters because the UK’s fiscal position leaves little room for a government to ignore markets. Like much of the developed world, the UK carries a heavy debt burden, and that creates a real constraint on policy. Regardless of ideology, any government has to retain the confidence of investors who fund its borrowing. The Liz Truss episode in 2022 was a clear reminder of how quickly markets can push back when policy appears to move too far from fiscal credibility.

This is why we think the range of realistic outcomes may be narrower than the political headlines suggest. The tone from Westminster may change, and the policy direction may shift, but the underlying constraints remain. We are therefore alert to the risks, but not alarmed.

For investors, the key point is not to mistake political volatility for an investment crisis. They are not the same thing. We have been looking through the recent market moves with an eye on opportunity, and have been actively managing our UK gilt exposure as events have unfolded.

It is also important to keep the UK in perspective. For domestic investors, these developments can feel very close to home. But within a well-diversified global portfolio, the UK remains only one part of a much broader investment mix.