ABSI - The Far-Left Strikes Back in a Weekend of Elections

Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets.


It was a busy weekend of elections over the past week with the UK, France, and Iran hitting the polls to decide on how their various nations will be governed into the future. While the UK fell broadly in line with expectations, surprises came from Iran, which elected a reformist President, and France where the far-left prevailed over a predicted far-right outcome. ABSI this week will summarise the week that was in the year of elections.

On Thursday, July 4th, the citizens of the United Kingdom went to the polls to vote in the general election. As expected, after 14 years in opposition the Labour party has returned to power in a landslide victory against the Conservatives. Of the 650 seats, Labour won 412, an increase of 214, while the Tories lost a whopping 252 seats only winning 121 seats, though this was seen as an outperformance by some. Other notable results include the Scottish National Party (SNP) being wiped out to 9 seats (down 38), the centrist Liberal Democrats winning 72 seats (up 64), the Greens taking a record 4 seats (up 3) and the Reform UK party, led by the polarising Nigel Farage, winning 5 seats.


ABSI 09.07.24 parties gained and lost

Source:  BBC


With Labour in firm control with its biggest majority since Tony Blair in 1997, its leader Keir Starmer becomes the UK’s Prime Minister. Not a lot is known about the man who has run a relatively quiet campaign, allowing the Tories to trip over themselves, but he does enter the spotlight during a difficult period for the nation. Named after the founder of the Labour party, Starmer entered politics in his 50s after a successful career as a barrister that saw him knighted for his services to criminal justice. This legal sense and need to do “right” was evidenced by his unwillingness to make policy promises that were uncosted leading him to be labelled as “boring”. But boring is probably what the UK needs right now and the new PM has committed to focus on the essentials - healthcare, inflation, and help raise general living standards. Given the large majority, Starmer will have time to let his policies take effect provided his party doesn’t stab him in the back. 

On Friday, July 5th, Iran went to the polls to elect their new president following the shock death of then-president Ebrahim Raisi in a helicopter accident in May. In what could be a turning point for the embattled nation, the people elected a reform-minded candidate in the form of former heart surgeon Masoud Pezeshkian. Dr. Pezeshikan ran on an agenda of opening dialogue with the West and giving more rights to women, such as the right to dress as they choose. This was in stark contrast to his opponent, Saeed Jalili, a traditionalist who advocated for confrontation with the West and for continued enforcement of the current conservative system.


ABSI 09.07.24 pezeshkianSource:  Al Jazeera


It is important to appreciate the complexity of the Iranian government system which comprises various roles within the “Islamic Republic” including the Supreme Leader, known as the Ayatollah who oversees all branches of government and is elected by a Guardian Council of clerics, the President who executes laws and sets government policy, and the Parliament who enact laws. Iran’s current Supreme Leader, Ayatollah Ali Khamenei, a dictatorial leader having been in power for 35 years, traditionally holds extreme conservative views which has stifled reformists in the past. However, by allowing the election of Pezeshkian it may indicate that he may be listening to the will of the people who have been frustrated with the lack of progress in the country over the previous decades. 

On Sunday 7th July the biggest surprise saw the French people return to the polls for the third time in a month to vote in National Assembly elections. The results from the first round a week prior indicated that Le-Pen’s far-right National Rally (RN) party, however, it was the newly assembled far-left alliance of New Popular Front (NPF), an alliance of four primary left-wing parties, that is on track to win 182 seats, ahead of Macron’s centrist Ensemble Alliance’s (EA) 168 seats, and relegating RN to a disappointing third place with 143 seats. Unsurprisingly, no party secured an outright majority in the 577-seat parliament and so the French people are in for more disruption with a hung parliament.


ABSI 09.07.24 FranceSource:  BBC


While there is no doubt disappointment from RN, there was a silver lining as it is now the party with the single-most MPs (the other parties are coalitions) and has increased this number from 88 MPs to over 140 MPs whilst also winning the popular vote with 32%. However, they were outmanoeuvred by Macron and the left which saw them strategically withdrawing hundreds of candidates in order to avoid splitting the vote in specific jurisdictions where there was a 3-way battle and the RN candidate was winning.

Attention now turns to who will be the next Prime Minister of France. The current PM, Gabriel Attal, has handed in his resignation to President Macron and it is up to the President to choose his successor. While traditionally this has gone to the party with the strongest political force, Macron is not legally bound to abide by this rule. Adding more uncertainty is the fact that NPF chose not to run with a figurehead, likely because the four parties couldn’t come to a consensus on the issue. The leading contender is Jean-Luc Mélenchon who is the leader of France Unbowed and is projected to obtain the most seats amongst the coalition. 

On a final note, while we’re on the topic of elections it might be worth speculating that there might be another added to the long list, with rumours that the Australian labour government will call an early election. While the next election doesn’t need to be held until May 2025, with forecasts for another interest rate hike or two in the future along with a gloomy economic outlook, it makes sense that Prime Minister Albanese would like to lock in a second term now. The whispers are that it could be called for August 31st which would mean it would need to be announced by July 28th to adhere to the 33-day notice. Get your BBQs ready.


A quick detour to announce the BPC NRL Tipping Competition! 

Welcome to the BPC NRL Tipping Competition for 2024. The season has kicked off with a bang in the glittery lights of Las Vegas. Panthers are favorites to take the crown again but the Broncos look like a formidable opponent to take revenge from the heartbreak of 2023. BPC loves its footy and we're very excited for the season ahead. We also love to win stuff so please keep an eye out for the prizes on offer. Sign up and join the game!


We offer value-rich content to our BPC community of subscribers. If you're interested in the stock market, you will enjoy our exclusive mailing lists focused on all aspects of the market.

To receive our exclusive E-Newsletter, subscribe to 'As Barclay Sees It' now.