Labour vs Conversative: the numbers behind the election

Originally published at: Labour vs Conversative: the numbers behind the election – InvestEngine Insights

Which party is better for markets? This chart shows the average annualised returns for the UK market under both Conservative and Labour leadership since 1970:

While the chart shows Labour being more friendly for UK plc, since 1970 the Conservatives have been in power for twice as long as labour. Labour have only seen 4 PMs since 1970 and have been in power for 18 years versus 8 PMs for the Conservatives over 36 years. Meaning that despite lower annualised returns, because they’ve been in power for longer, cumulatively investors would’ve been better off investing under Conservatives. £100 would have grown to £4,902 under the Conservatives, but only £447 under Labour:

However, letting political beliefs get in the way of a buy-and-hold strategy has been costly. If investors had simply held that £100 through all political regimes, the same £100 would be worth £21,893 today:

Which Prime Ministers have been the best for markets? The table below shows all Prime Ministers since 1970 ranked by UK market annualised returns:

Prime Minister Party Total return over term Annualised return
Harold Wilson Labour 47% 20%
Jim Callaghan Labour 74% 20%
Margaret Thatcher Conservative 488% 17%
John Major Conservative 159% 16%
Rishi Sunak Conservative 24% 13%
David Cameron/Nick Clegg Conservative/Liberal Democrat 54% 9%
Theresa May Conservative 26% 8%
Tony Blair Labour 92% 7%
Edward Heath Conservative 26% 6%
Boris Johnson Conservative 10% 3%
David Cameron Conservative 1% 1%
Gordon Brown Labour -9% -3%
Liz Truss Conservative -4% -25%
Source: Bloomberg. The UK market is MSCI UK Net Total Return in GBP between June 1970 and July 2024. Past performance is no indication of future returns. Capital at risk.

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