Big investors are warming to Britain after a landslide election win for its new Labour government but remain wary of placing long-term bets until Prime Minister Keir Starmer can convince them his economic growth plans are credible.
Sterling, the strongest major currency against the dollar this year, nudged higher on Friday when the scale of Labour's victory became clear. The U.K.-focused FTSE 250 share index, which has outpaced the more global FTSE 100 year-to-date, rose to its highest since April 2022.
But investors said Labour still needed to revive long-term confidence in U.K. markets that have struggled since 2016's Brexit vote and the chaos wreaked by Conservative former Prime Minister Liz Truss' 2022 mini-budget.
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